Too small or too large to trust your partners in multipartner alliances? The role of effort in initiating generalized exchanges

Summary This article describes how smaller and larger firms face difficulties in establishing trust in multipartner alliances. Using survey data from a sample of 141 firms engaged in such alliances, we examine a curvilinear relationship between firm size and trust. Our results suggest an inverted U-shaped relationship between firm size and the degree to which a firm develops trust in partners. We also establish that effort to establish generalized exchanges is important for trust building. Specifically, we notice the inverted U-shape to be particularly prominent among firms that do not make the effort to establish generalized exchanges, which implies that smaller and larger firms depend upon concerted effort to establish generalized exchanges in developing high levels of trust in alliance partners. This has implications for explaining important influences on trust building in social exchange systems.