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Gulati, 1995; McAllister 1995; Nooteboom, 2002; Shapiro, 1987; Zucker, 1986). Making
distinctions between dif erent types of trust is important, because any breach of trust
af ects network structure, generating dif erent dynamics and, hence, requires dif erent
responses (Nooteboom, 2002). In consideration of the assumptions of our research and
the specii city of the selected empirical i eld, among the various forms of trust, our study
distinguishes between relational trust and competence-based trust.
Relational trust
is related to aims, intention, dedication/care, leadership capabil-
ity, benevolence and so on. It emphasizes the social dimension of the relationship. In
particular, the degree of relational trust is closely connected to the past experiences
shared between local actors and is path dependent (Rousseau et al., 1998). A positive
past experience can strengthen the relation and reinforce the development of inter-i rm
routines, while a negative one can decrease the degree of relational trust between the
parties. Relational trust supports, above all, the tacit knowledge transfer among local
i rms (Hansen, 1999). In this perspective, trust is a sort of evolutionary mechanism with
a 'memory' that stores knowledge about common past experiences. The balance between
the positive and the negative experiences generates trust or distrust and thus impacts on
the selection process of partners and routines over time (Essletzbichler and Rigby, 2007).
The concept of 'positive' or 'negative' experience may be vague: cognitive patterns and
absorptive capacities of dif erent i rms can sometimes evaluate the same experience dif-
ferently. Therefore, this form of trust includes many individual or emotional factors that
inl uence the absorptive capacity of the i rm in a recursive loop (Cohen and Levinthal,
1990).
The concept of
competence- based trust
relates to the perception of the ef ective
contribution of the partners in terms of knowledge provided in the framework of the
inter-organizational relationship. Collaborative know-how, embedded in the local
inter-organizational routines, emerges only if all network agents provide adequate
know-how in order to achieve the network aims, and if relative absorptive capaci-
ties permit its ef ective exploitation/exploration (Nooteboom, 2004; Simonin, 1997).
Competence-based trust concerns elements such as ability, skills, languages, quality
of products and services, i nancial credibility and so on. This type of trust is usually
more 'rational' than the relational one, because it is often based on the consideration
of more objective information, such as economic and i nancial indicators or product/
service performance.
Second, in order to look at social capital at the 'micro-level' - i rm variety - we con-
sider 'reputation'. Many theories of the i rm, including the resource-based view, the
resource dependence stream, the transaction cost theory, agency and game theories,
recognize the importance of reputation for organizations (Cao and Schniederjans,
2006; Dahl and Pedersen, 2005; Noorderhaven et al., 2002; Roberts and Dowling, 2000;
Saxton, 1997). This topic concerns many disciplines: organization theory, psychology,
sociology, marketing, i nance, economics and so on. Reputation is often described in
terms of customer loyalty, market trust, i nancial credibility, and name recognition.
Moreover, a number of empirical surveys on reputation have already been published
(e.g. Ely and Valimaki, 2003; Engelmann and Fischbacher, 2003). This heterogeneity has
produced a vague and indistinct concept of reputation, and a substantial absence of a
generally agreed dei nition in the literature. The Mori British Institute
2
dei nes corporate
reputation as follows:
