In our study, we attempt to trace the influence of cultural distance through its impact on the cost of inter firm cooperation, that is costs “arising from the need to collaborate with a partner” (White, 2005: 1383).2 As noted by White, cooperation costs have two components: those arising from task-related coordination needs (see also, Gulati & Singh, 1998) and those arising from inter-firm diversity. In the case of TSU, task-related cooperation costs are those incurred when individuals with different specializations(e.g., hardware and software engineers) need to undertake joint problem solving to enable the effective combination of partners’ specialization.