The Dynamic Nature of Absorptive Capacity and Trust: How they Influence and Impact upon One Another.

Many firms particularly those in the technology sector rely on their absorptive capacity as being a key indicator of their success. Trust between firms and within firms plays a crucial role in facilitating absorptive capacity and vice versa. The aim of this working paper is to examine the importance of trust and absorptive capacity on each other. A learning and alliance perspective is taken in order to explain and understand trust and absorptive capacity. Key words: trust, absorptive capacity, alliance