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drives collaboration and when lack of trust impedes collaboration? Moreover, does the
trust factor impact any of the other factors that determine collaboration formation by
SMEs? The current study aims to investigate answers to these questions through an
empirical research methodology.

The study began with a set of variables taken from literature review and addition of new
variables derived from expert interviews of four pharmaceutical SME owners. This was
followed by descriptive research with a sample of 174 SMEs of pharmaceutical sector of
Gujarat. The responses were collected through questionnaire. Exploratory Factor Analysis
was conducted to identify motives of collaboration in SMEs. Next, one-sample t-test was
conducted to assess enablers and inhibitors of collaboration in SMEs. This was followed
by ANOVA to study the nature of enablers and inhibitors across the different
pharmaceutical clusters. Next, simple regression was used to assess if and how motives
of collaboration impact the enablers and inhibitors of collaboration.

Further, the composition of trust was investigated using Exploratory Factor Analysis. The
profiles of trust playing the role of an enabler and lack of trust playing the role of an
inhibitor were identified through Discriminant Analysis, followed by Regression. Next,
Hierarchical Multiple Regression Analysis was conducted to assess whether composite
trust moderates the other enablers and inhibitors. Lastly, ANOVA was conducted to
compare the firmographic variables across clusters.
The study finds that SMEs of pharmaceutical industry, concentrated in four city-based
clusters of Gujarat, have mixed motives of collaboration ranging from amongst others,
pursuit of Innovation on one hand to Cost and Risk Reduction on the other. Therefore, as
some studies discuss the broad ranging motives of collaboration, the current study
advances the knowledge in the context of Indian SMEs. Moreover, SMEs of
pharmaceutical sector are found to have presence of trust; geographic proximity; power
balance; large partner size and strategic similarities as important enablers of
collaboration. On the other hand, the study reveals that SMEs face collaboration inhibitors
in the form of lack of trust; power imbalance; uncertainty related to collaboration;
resource inadequacy; smaller partner size; strategic dissimilarities; legitimacy of partner
firm and difference in risk acceptance levels. This insight corroborates with extant
literature and advances the body of knowledge with SME context. Additionally, the study
demonstrates that size of an industry cluster in terms of number of firms has no impact
on the nature of enablers and inhibitors. In simpler terms, factors impacting collaboration
are industry specific and are not influenced by size of an industry cluster. This insight is
an addition to extant studies on collaboration in SMEs.

The study also reveals that out of the four motives identified, Innovation and Strategy

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