research paper on trust and contracts and their implication for network relations of smes in international business. Needs to be 10 pages.

Need an research paper on trust and contracts and their implication for network relations of smes in international business. Needs to be 10 pages. Please no plagiarism. SME’s have limited resources and this leads them to look for international alliances (Coviello & Munro, 1992) and in turn, this offers them growth opportunities (Brush 1992). There is no doubt that as compared to MNC’s, the SME lacks resources to expand. One reason for seeking Internationalization is the search for resources.

Dunning (1993) has stated several categories of motives for entry into international business. These are market seeking, resource seeking, efficiency-seeking and strategic resource seeking motives. To this a fifth category, network seeking motives (Dimitratos & Plakoyiannaki, 2003) have been added for recognizing networks as a significant part of internationalization corresponding to recent research. It is in this connection that the network seeking motive becomes exceptionally important. This can be useful under any kind of entry mode.

A new term social capital explains this as it is a form of bridging the divides rather than bonding the divides. This can be of great value as it has the potential to add new information, ideas, and opportunities. Networks can be described as social capital that is intangible but that drives the international growth of entrepreneurial firms, particularly those in High Technology. The network is based on reciprocal responses, individual relationships, mutual respect, and trust. Confidence in each other to deliver is the basic and core element of a successful network and it is developed through repeated interactions. Trust determines the solidity and reliability of the network link.

It can be argued that Networking does not really contribute to the lowering of Transaction Cost (TC) as TC is dependent more on the structure of the firm involved.TC will be high in a hierarchical type of firm which is heavy with bureaucracy. low in a professional type where an individual is more relevant and average in all others that will face normal market environment (Williamson 1985).