The creation of trust: the interplay of rationality, institutions and exchange

Abstract

Relationships based on notions of trust represent a central aspect of the communitarian model of industrial districts. Examination of trust has generated a substantial literature; nevertheless, there have been relatively few studies that have empirically considered the sources of trust that operate in local ties and connections. The paper aims to redress this imbalance by investigating relationships in the Arve Valley industrial district near Geneva. It considers sources of trust by engaging the theoretical framework of Möllering's (Möllering, G. 2006a. Trust: Reason, Routine, Reflexivity. Oxford: Elsevier) model of trust which is predicated on the concepts of reason, routine and reflexivity. In conjunction with this, the field research uses in-depth semi-directive interviews with small-firm managers in the Arve industrial district. The paper's findings contribute to trust and industrial district literature by examining the complex interplay between the three antecedents of reason, routine and reflexivity in the creation of local trust in the industrial district setting. In essence, the paper proposes that the availability of information about potential partners and the existence of strong interdependencies inform trust decisions based on evaluation and calculation more than local norms and institutions.