Breaking trust? International partnership exit and learning about opportunities

Abstract

This study investigates how exiting key international partnerships affects trust and subsequent learning about opportunities in international markets. We identify three distinct exit approaches using qualitative data from small and medium-sized enterprises (SMEs). The first approach focuses on contractual exit provisions, which destroy affective trust but maintain cognitive trust as a basis for ongoing learning about opportunities in foreign markets. In the second approach, SMEs exit partnerships by claiming control, thus eroding affective and cognitive trust, turning former partners into adversaries and limiting the ability to learn from new relationships. The third approach, a consensual exit, maintains affective trust, offering future opportunities for market learning. This study advances the understanding of the role of trust in SME internationalisation by identifying the effects of exit approaches on post-exit opportunities through the preservation of residual trust. Crucially, the study reveals that learning about opportunities in foreign markets can endure beyond partnership exit.