DOES FAMILIARITY BREED TRUST? THE IMPLICATIONS OF REPEATED TIES FOR CONTRACTUAL CHOICE IN ALLIANCES.

Exploring the factors that explain the choice of governance structures in interfirm alliances, this study challenges the use of a singular emphasis on transaction costs. Such an approach erroneously treats each transaction as independent and ignores the role of interfirm trust that emerges from repeated alliances between the same partners. Comprehensive multiindustry data on alliances made between 1970 and 1989 support the importance of such...