Abstract
Despite the considerable amount of research regarding trust as one of the most important characters and competitive advantages for an industrial cluster, few empirical studies have examined whether geographic proximity still leads to higher levels of trust in the current Internet era. This article explores this issue of trust from a network embeddedness perspective. Based on the data from Zhongshan gas appliance cluster, we employ structural equation modeling to examine the extent to which relational embeddedness, structural embeddedness, and positional embeddedness have any impact on trust-building in the cluster. Our findings reveal that high clique trust and low aggregate trust coexist in the cluster, showing that the effect of geographical proximity on trust has been weakened and is no longer a sufficient condition for trust-building. This study also gives some suggestions on how to improve the trust within a cluster through network governance.
Highlights
Industrial clusters have attracted worldwide attention because of their great contributions to regional economic development (Mudambi, Mudambi, Mukherjee, & Scalera, 2017; Porter, 1998), in which trust is considered as an important mechanism for overcoming various uncertainties and complex conflicts, and yielding benefits to all agents (Alvarez, Barney, & Bosse, 2003)
Hardin (1996), for example, points out that the network system has the capacity of strengthening reliability among enterprises and fostering trust relations. In consideration of these observations, we propose the following hypothesis: Hypothesis 3 (H3): Positional embeddedness is positively related to inter-organizational trust-building within an industrial cluster
This study is designed to explore whether geographic proximity still leads to high level of trust-building within an industrial cluster, especially in the Internet era
Summary
Industrial clusters have attracted worldwide attention because of their great contributions to regional economic development (Mudambi, Mudambi, Mukherjee, & Scalera, 2017; Porter, 1998), in which trust is considered as an important mechanism for overcoming various uncertainties and complex conflicts, and yielding benefits to all agents (Alvarez, Barney, & Bosse, 2003). The physical closeness of organizations in an industrial cluster makes it easy to establish various networks, and the behavior of each firm within networks is influenced by other agents in a cluster (He & Rayman-Bacchus, 2010). Internet technology provides companies with new avenues to effectively support their business processes and helps to improve performance, in particular, the ways of communication, marketing as well as customer relationship management (Silva & Goncalves, 2016). A number of businesses even within industrial clusters are conducted relying on network platforms rather than traditional physical channels such as face-to-face contact (Chandna & Salimath, 2018; Paurav & Judy, 2018). More open and efficient information exchange via the internet has been regarded
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