Cross-national distances and Alliances

The globalization of the world economy has increased the cross border alliances significantly in the last decades. This has, however, been also accompanied with high failure rate. A smart partner selection is crucial to be successful in strategic alliances. Next to a matching partner, trust is regarded as a key aspect in strategic alliances. Trust is important in every relationship but more so when there are high uncertainty and large risks. The consequence of cross border alliances is that it creates uncertainty by cross-national distances of the home country of a firm and the host country.