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Does familiarity breed trust? Revisiting the antecedents of trust

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  • Ranjay Gulati

    (Northwestern University, IL, USA)

  • Maxim Sytch

    (Northwestern University, IL, USA)

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    Abstract

    This paper investigates how the history of interaction between organizations and between organizational boundary spanners contributes to the formation of trust between firms. Our findings, using data on the supplier-buyer relationships of two major US auto manufacturers, suggest that history affects trust formation in a complex non-linear fashion, involving a period of ambivalence early in a relationship. We show that certain kinds of exchange partners can systematically reap differential returns from a common history of interaction. Organizational similarity significantly enhances the ability of exchange partners to translate the benefits of the joint history of interaction into a stock of trust. Copyright © 2008 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/mde.1396
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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

    Volume (Year): 29 (2008)
    Issue (Month): 2-3 ()
    Pages: 165-190

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    Handle: RePEc:wly:mgtdec:v:29:y:2008:i:2-3:p:165-190

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    Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976

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    1. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
    2. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
    3. Ariño, Africa & de la Torre, Jose & Ring, Peter S., 2001. "Relational quality: Managing trust in corporate alliances," IESE Research Papers D/434, IESE Business School.
    4. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
    5. Greif, Avner, 1989. "Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 857-882, December.
    6. Sako, Mari & Helper, Susan, 1998. "Determinants of trust in supplier relations: Evidence from the automotive industry in Japan and the United States," Journal of Economic Behavior & Organization, Elsevier, vol. 34(3), pages 387-417, March.
    7. Werner Güth & Wolfgang Klose & Manfred Königstein & Joachim Schwalbach, 1998. "An experimental study of a dynamic principal-agent relationship," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 19(4-5), pages 327-341.
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    Cited by:
    1. Josef Windsperger & Nina Gorovaia, 2011. "Knowledge attributes and the choice of knowledge transfer mechanism in networks: the case of franchising," Journal of Management and Governance, Springer, vol. 15(4), pages 617-640, November.
    2. König, Michael D. & Battiston, S. & Napoletano, M. & Schweitzer, F., 2011. "Recombinant knowledge and the evolution of innovation networks," Journal of Economic Behavior & Organization, Elsevier, vol. 79(3), pages 145-164, August.
    3. Sophia Ruester, 2010. "Inter-Organizational Trust as a Shift Parameter in the Extended Transaction Cost Framework: A first Application to the LNG Industry," RSCAS Working Papers 2010/18, European University Institute.
    4. Rose, Timothy & Manley, Karen, 2011. "Motivation toward financial incentive goals on construction projects," Journal of Business Research, Elsevier, vol. 64(7), pages 765-773, July.
    5. Lumineau, Fabrice & Oxley, Joanne, 2012. "Let’s work it out (or we’ll see you in court): litigation and private dispute resolution in vertical exchange relationships," MPRA Paper 38361, University Library of Munich, Germany.
    6. Francis Bidault & Thomas Hildebrand, 2012. "The distribution of partnerships benefits: Evidence from co-authorships in economics journals," ESMT Research Working Papers ESMT-12-08, ESMT European School of Management and Technology.

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