I empirically test the role of trust in strategic alliances by using survey data from 67 German small and medium-sized enterprises (SMEs). Empirical findings indicate that high trust levels are a good predictor of alliance success. This result is encouraging, as it suggests that well-performing...

There is wide debate over the impact of uncertainty on firm behavior, due to the difficulty both of measuring uncertainty and of identifying causality. This paper takes three steps that attempt to address these challenges. First, we develop an instrumental variables strategy that exploits firms'...