Geography Reference
In-Depth Information
distribution and the evolution of i rm variety within districts are also inl uenced by the local
social capital
. The latter is a local asset that is non-tradable and historically developed
following a path-dependent evolution, representing an interesting i eld of research in the
evolutionary economics perspective (Nelson and Winter, 1982).
1
According to the evolu-
tionary economic geography perspective, both i rm- and network-specii c characteristics
are considered (micro and meso levels of analysis).
Economic geography tries to explain the concentration and distribution of economic
activities across space and has already taken into account the critical role of social capital
(Dei Ottati, 1994; Putnam, 1993). To integrate an evolutionary approach means to con-
sider the processes that have determined these social patterns (Boschma and Frenken,
2006). This perspective is particularly coherent with the nature of factors such as trust
and reputation. As mentioned before, these social assets aren't tradable and can't be
modii ed radically in the short term (Zucchella and Ganzaroli, 2003). They are the
outcome of a long path-dependent process, stemming from a series of mutual interac-
tions, which changes the cognitive schemes and beliefs of local inhabitants and i rms
(Nooteboom, 2004). In this sense, economic geography, economic growth and social
dynamics are strictly interconnected (Boschma and Frenken, 2006). In order to manage
social assets, i rms develop a specii c know-how stored into organizational routines,
rituals and habits. This is a valuable tacit knowledge that is not homogeneously spread
in the territory: social assets represent an important dimension of i rm variety. According
to these assumptions, a better explanation for the mutual relationship between i rm- and
network- specii c social resources becomes an important research issue in evolutionary
economic geography.
The core research issues of this chapter are represented by trust and reputation inside
local clusters. Trust refers to local- and network-specii c resources, because it encom-
passes at least two agents. Second, reputation refers to i rm-specii c intangible resources
and permits us to analyse the social variety within the district. Indeed, it is reasonable
to assume that, within local clusters, a i rm's reputation is grounded also on its superior
ability in the management of social relationships (Ely and Valimaki, 2003; Nooteboom,
2002).
In this conceptual framework, the development of trust in each dyadic relation
(network resources) shapes the reputation degree (i rms' intangible resources) of the
actors involved, thus altering the degree of variety of social capital within the district.
Second, the evolution of reputation inl uences trust development at the network level.
Over time, this loop creates a pattern of mutual interactions in the business activity
where 'pieces' of knowledge are embedded in both social ties and single organizations
(Brown and Duguid, 1991; Morgan, 1997). This close connection between trust and
reputation has also been coni rmed by other studies (Aringhieri et al., 2006; Dahl and
Pedersen, 2005; Elangovan and Shapiro, 1998; Xiong and Liu, 2003).
After this introduction, in the second section, this contribution proposes an opera-
tionalization of 'trust' and 'reputation' and a short overview about the related literature.
The third section focuses on the main links between reputation and network theory, with
special attention to its impact on inter-organizational structure, leading us to formulate
two research propositions. The latter are tested in the fourth section, discussing the
results obtained from a network analysis on three Italian tourism local clusters, where a
large number of small sized i rms (hotels, ski schools, travel agencies and so on) compete
