Geography Reference
In-Depth Information
Variable
TRUST (network/district-specific resources)
Form
Relational
Competence-based
Drivers of perception
more emotional
more rational
Main determinants
aim, intention,
dedication/care, benevolence
ability, skill, knowledge,
language
medium-high
medium-term
Lock-ins
often high
Frequency of change
long-term
Variable
REPUTATION (firm variety)
Form
Content of signal activity
Relational
Competence-based
emotional connections, social
credibility, leadership
capability
knowledge and skill, quality,
financial credibility
Perspective
social
economic
Figure 13
.
1
Dynamic relation between trust and reputation (evolutionary loop)
individual (Merry, 1984). When network members interact over a long period of time,
they develop shared cognitive structures and inter-organizational routines (Denicolai
and Zucchella, 2006; Nelson and Winter, 1982). Reputation may also rel ect profes-
sional competence (Barber, 1983; Dobing, 1993; McKnight et al., 1995). In this case,
competence-based reputation is inl uenced by competence-based trust, which involves
factors such as knowledge and skills, quality of product/service, i nancial credibility.
Figure 13.1 shows a synthesis of the notions discussed in this section.
Trust dynamics in the local network is one of the most important sources of i rm
reputation and, at the same time, reputation can change the social network structure,
especially in terms of the trust dimension. For example, a i rm's good reputation can
increase the expectation that its behaviour will be fair and predictable. In other words,
reputation can increase the degree of trust between i rms. A similar reciprocal interac-
tion is observed between competence-based and relational trust, as well as between
competence-based and relational reputation. Trust and reputation are two dif erent
social capital phenomena within districts, but there exists a self-inl uencing evolutionary
loop between them. Over time, this process af ects i rm variety within the geographical
cluster, especially in terms of social capital. Second, environmental events and district-
specii c path dependence inl uence the evolution of this loop by selecting the best inter-
organizational dynamic processes among local agents, which then become relatively
stable inter-organizational routines based also on social mechanisms.
3. Informal structure of local networks: the dynamics of nodes' centrality
The previous section highlighted the relationship between the district-specii c social
capital and the accumulation of social resources within the i rms. It contributes to
explain the heterogeneity of local agents. In order to complete this theoretical frame-
work, a focus on the impact of network structure on i rm reputation is necessary.
