Abstract
The relationship between inter-organizational trust and contracts has attracted substantial attention in the literature. A number of scholars have debated whether trust and contracts are complements or substitutes. The non-unified nature of theory and mixed empirical results present a challenge in drawing a clear picture. We use a 26 year case study of a software firm and its relationships to shed light on this important issue. We find that dimensionalizing trust into benevolence-based and competence-based helps offer a more nuanced and clearer view of the relationship between trust and contracts by investigating the conditions under which they act as substitutes or complements.
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