The Role of Trust and Contracts in the Expansion of Technology-Intensive SMEs

The main objective of this chapter is to provide an insight into the collaboration between technology-intensive small- and medium-sized enterprises (SMEs) and a large multinational firm. In this context, the role of trust and contracts has been assessed. It is argued that technology-intensive SMEs have to rely on trust with large multinational companies. However, it is crucial to have some mechanism that enables small firms to attract a large company to be committed to a stable relationship with a smaller partner. Such a mechanism is demonstrated by a simple model of profit sharing which may allow to develop a trustworthy collaboration between asymmetric partners.