building trust in economic space
TRANSCRIPT
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http://phg.sagepub.com/ Progress in Human Geography
http://phg.sagepub.com/content/30/4/427The online version of this article can be found at:
DOI: 10.1191/0309132506ph617oa
2006 30: 427Prog Hum Geogr James T. MurphyBuilding Trust in Economic Space
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Progress in Human Geography 30, 4 (2006) pp. 427–450
© 2006 SAGE Publications 10.1191/0309132506ph617oa
I Introduction
Extensive scholarship in economics, eco-
nomic sociology, organizational theory, and
economic geography has demonstrated how
the innovativeness, performance, and com-
petitiveness of firms and industries areinfluenced by social context and the ability of
economic agents to develop networks and
mobilize relational resources for information
acquisition, learning, and exchange relations
(Granovetter, 1985; North, 1990; Burt, 1992;
Putnam, 1993; Amin and Thrift, 1993; Uzzi,
1996; Storper and Salais, 1997; Cooke and
Morgan, 1998; Cooke and Wills, 1999;
Malecki, 2000; Helmsing, 2001; Scott, 2002;Scott and Storper, 2003). Despite the signifi-
cant contributions of this literature, geogra-
phers are still grappling with ways better to
Building trust in economic space
James T. Murphy*
Graduate School of Geography, Clark University, 950 Main Street, Worcester,
MA 01610-1477, USA
Abstract: While there is widespread recognition of the importance and role of trust in facilitating
regional development, technology transfer, and agglomeration economies, the concept remains
rather undertheorized within economic geography and regional science. This paper reviews and
assesses the literature on the role and constitution of trust for economic and industrial
development and presents a conceptualization of the trust building process that accounts for theinfluences of agency, institutions, materials, and interpersonal expression. In doing so, geographic
concerns about the role of space and context are linked to economic and sociological
conceptualizations of trust and to scholarship from actor-network theory (ANT) and social
psychology regarding the influence of power, non-human intermediaries, and performance on
social outcomes and network configurations. The result is a heuristic framework for analyzing
trust-building processes as temporally and spatially situated social phenomena shaped by context-
specific subjective, intersubjective, and structural factors. The conceptualization’s broader
significance lies not in detailing the many factors that influence trust but in its contextualization of
the micro-social processes that can strengthen business relationships. In doing so, the framework
can facilitate a move beyond solely instrumental conceptualizations of trust and toward a
relational understanding of how the means for establishing and sustaining trust influence the
development and potential of such ‘ends’as clusters and production networks.
Key words: actor-network theory, economic geography, networks, power, social capital, social
psychology, trust.
*Email: [email protected]
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theorize and empirically assess the sociospa-
tial contexts, dynamics, and interactions that
constitute learning processes, knowledge
transfer systems, clusters, global production
networks, and regional economies (Angel,
2002; Sheppard, 2002; Dicken, 2004;
Morgan, 2005; Peck, 2005; Yeung, 2005a).The spatial characteristics and social patterns
of these phenomena are well documented
but there remains much to be learned about
the social, economic, and spatial processes
through which firms, industries, cities, and
regions achieve the economies of scope or
scale necessary to become successfully inte-
grated into global markets, capital circuits,
and knowledge flows. Moreover, recent con-
ceptual developments (eg, institutional thick-
ness, communities of practice, relationalproximity, or learning regions) remain, to
some, ‘fuzzy’, vague, or difficult to apply from
a policy-making perspective (Markusen, 1999;
Martin and Sunley, 2001; Morgan, 2005). All
told, there is a need to establish more rigorous
links between micro-social interactions (eg,
trust-building processes), meso-level struc-
tures (eg, industrial districts or clusters), and
macro-scale phenomena (eg, global markets or
value chains) (Dicken et al., 2001; Bathelt and
Taylor, 2002; Mackinnon et al., 2002; Oinas,2002; Ettlinger, 2003; Bathelt et al., 2004;
Dicken, 2004; Hess, 2004; Yeung, 2005a).
Networks, and the associations that bind
them together, are key units of analysis for
research into the sociospatial dynamics of
innovation, regional development, and eco-
nomic globalization. As Bunnell and Coe
(2001) note:
We suggest that networks, with theirassociated attributes of connectivity,
reciprocity, embeddedness and power relationsneed to be brought to center stage. Tracing
networks can assist in identifying the threadsthat both bind and link together particularclusters and nodes of activity, thereby creatingdifferent ‘scales’ or territorializations of activity. (Bunnell and Coe, 2001: 578)
Trust is a key influence on the constitution
and development of economic spaces like
production, innovation, and commodity
networks; one that embeds and stabilizes
relationships, fosters knowledge and tech-
nology diffusion, and helps to create order
in the global economy. As Hess (2004)
observes:
Globalization, then, is obviously not a processof disembedding based on mere markettransactions and impersonal trust, but rather aprocess of transnational (and thereby
translocal) network building or embedding,creating and maintaining personal relations of trust at various, interelated geographicalscales. (Hess, 2004: 76)
While there is widespread recognition of
trust’s importance and role in facilitating
regional development, technology transfer,
and agglomeration economies, it remainsrather undertheorized within economic geog-
raphy and regional science. Specifically, the
literature lacks a clear and consistent concep-
tual framework addressing the processes or
mechanisms through which trust (or distrust)
emerges in a social or economic context.
Whether it facilitates productivity, learning,
and innovation in firms, helps to embed or
ossify particularistic kinds of business net-
works within or between places (eg, family,
clan, or ethnic networks), is stronglyestablished (eg, through friendship or kin rela-
tions), or is weakly ensured (eg, through
goodwill or faith), trust is a fundamental
characteristic of business networks, one
which can significantly influence the transac-
tion costs of exchange, the flexibility, innova-
tiveness, or adaptability of firms, and the
quality of the information or knowledge
flows available to a businessperson. As such,
a detailed understanding of the relational
processes that lead to or prevent trust’s
emergence can tell us much about how
sociospatial structures like networks are actu-
ally performed and sustained by individuals
and firms.
Hudson (2004) recently noted that
an important objective of contemporary
research in economic geography should be
to understand how the flows, circuits, and
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practices that constitute the global economy
are constructed and situated in distinct times
and places. In applying and extending this idea
this paper argues that the study of trust –
broadly defined as a relational process and
socially constructed phenomenon that, in
part, enables structures such as networks,clusters, or commodity chains to emerge and
be stabilized over time – offers a conceptual
lens through which we can more deeply
examine and understand the dynamics of
industrial change and the sociospatial charac-
teristics, complexities, and contingencies of
economic processes. As Glückler (2005:
1732) observes, trust ‘is a fundamental pre-
condition for many forms of social organiza-
tion’ but one whose qualities and
contributions are inadequately understood.Trust’s specific role in inter-, intra-, and
extrafirm networks is an especially important
consideration but one that has received sur-
prisingly limited attention despite increasing
interest in the relational, discursive, and com-
municative dimensions of economic geogra-
phies (eg, Lee and Wills, 1997; Boggs and
Rantisi, 2003; Amin and Cohendet, 2004;
Yeung, 2005a; 2005b). This paper addresses
this concern by advancing a process-, power-,
and context-sensitive conceptualization of trust, one that can improve theoretical and
methodological links between the micro-
social interactions that constitute economic
relations and the meso-scale and macro-scale
phenomena characterizing the diverse geog-
raphies of the world economy (eg, clusters,
production networks, value chains, and
regional economies). The objective here is
not to assert that trust is essential for all
economic processes but to provide a more
rigorous conceptualization of the sociospatial
mechanisms through which it develops and is
mobilized by economic agents.
The discussion that follows reviews and
assesses the literature on the role and consti-
tution of trust for economic and industrial
development and presents a conceptualiza-
tion of the trust-building process; one that
explicitly accounts for the influences of
agency, institutions, materials, and interper-
sonal expression and which seeks to
contextualize the structural, cognitive, and
intersubjective factors that can lead to or pre-
vent the emergence of trust. In doing so, geo-
graphic concerns about the role of space and
context are linked to economic and sociologi-cal conceptualizations of trust and to scholar-
ship from actor-network theory (ANT) and
social psychology regarding the influence of
power, non-human intermediaries, and social
performance on network configurations.
ANT’s concern with power’s derivation and
practice and its attention to the role of het-
erogeneous materials (ie, human and non-
human agents) in shaping the ordering of
networks, make it significant for the study of
trust as a process influenced in part by powerrelations and the mobilization of intermedi-
aries such as contracts, letters of credit, and
technologies as demonstrations of legitimacy
or trustworthiness. The rich literature from
social psychology, conceptualizing and ana-
lyzing the cognitive, emotive, performative,
and structural dimensions of social encoun-
ters, draws on similar ideas but is particularly
strong in systematically accounting for the
influence of individual meaning systems on
social interactions and in documenting thesubtleties and complexities of face-to-face
communication. In bringing together seminal
ideas from ANT and social psychology, as
well as the extant trust literature, this paper
develops and advances a conceptualization of
trust as a sociospatial process enacted by
agents through relations mediated by struc-
tural factors, power differentials, emotions,
meaning systems, and material intermedi-
aries. The theoretical framework seeks to
shift our understanding of trust beyond static
conceptualizations – trust as instrument,
input, or structural component of networks –
and toward a more dynamic or relational per-
spective on how collaboration occurs and
where and/or why it is situated in particular
places and spaces. In doing so, we can deepen
our understanding of what actually consti-
tutes a network link or a business association
James T. Murphy 429
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and, consequently, improve our theorizations
of sociospatial phenomena such as clusters,
value chains, and learning regions.
The remainder of the paper is organized
into five sections. Section II briefly reviews
the economic geography literature on the
sociospatial dimensions of industrial changeand the role of trust for regional development
and innovation. Section III examines concep-
tualizations of trust from economics, eco-
nomic sociology, and organizational theory
and assesses their utility and applicability for
understanding network processes. Section IV
demonstrates how the actor-network theory
(ANT) and social psychology literatures offer
new opportunities for research into the
sociospatial dimensions of trust-building and
networking. Section V presents a conceptualframework that integrates ideas from the
theoretical perspectives reviewed. The paper
concludes in Section VI with a brief discus-
sion on future directions for trust research
and about the broader implications of the
conceptual framework.
II The importance of trust –
perspectives from economic geography
and regional science
Economic geographers and regional scientistshave extensively examined the social and
relational factors that shape industrial
agglomerations and clusters, facilitate (or
impede) urban and regional development,
enable (or disable) information, technology,
and knowledge diffusion and absorption,
incubate (or discourage) entrepreneurship,
and foster uneven development and spatial
concentration in the global economy (Amin
and Thrift, 1993; Grabher, 1993; Ettlinger and
Patton, 1996; Cooke and Morgan, 1998;
Storper and Salais, 1997; Amin, 1999;
Malecki and Oinas, 1999; Maskell and
Malmberg, 1999; Malecki, 2000; Yeung,
2000; Dicken and Malmberg, 2001; Henry
and Pinch, 2001; Bathelt and Taylor, 2002;
Mackinnon et al., 2002; Oinas, 2002;
Murphy, 2002; Scott, 2002; Nijkamp, 2003;
Scott and Storper, 2003; Bathelt et al., 2004;
Hess, 2004). Within these and related stud-
ies, trust is often viewed as an important
contributing factor to local development
(Bellandi, 2001; Henry and Pinch, 2001;
Bathelt and Taylor, 2002), the creation of
clusters, learning regions, and institutionally
‘thick’ places (Grabher, 1993; Amin andThrift, 1993; Cooke and Morgan, 1998;
Nadvi, 1999; Helmsing, 2001), the stabiliza-
tion and legitimization of place identities
(Hudson, 1998), the creativity, solvency, and
innovativeness of firms (Banks et al., 2000;
Murphy, 2002; Nijkamp, 2003; Glückler,
2005), and the historical development of
commercial and business networks (Winder,
2001; Stobart, 2004). Moreover, trust facili-
tates the transfer of codified information,
tacit forms of knowledge, and ‘soft’technolo-gies between places and the trust-building
processes used in and by firms can tell us
much about how workplaces, clusters, value
chains, and production networks are con-
structed (Ettlinger and Patton, 1996; Malecki
and Tootle, 1996; Ettlinger, 2003; Gertler,
2003; Bathelt et al., 2004; Mackinnon et al.,
2004).1
Beyond such instrumental assessments,
geographers are increasingly viewing trust as
a complex social phenomenon or processshaped by knowledge, emotions, reputation,
appearance, gender identities, place-specific
institutions, and power relations (Mackinnon
et al., 2002; Ettlinger, 2003; Gertler, 2003;
Murphy, 2003; Leyshon et al., 2004; Blake
and Hanson, 2005; Glückler, 2005).
Relational proximity is viewed by some as a
key resource for the development of trusting
relationships and is manifest in the degree to
which individuals, firms, and communities
are ‘bound by relations of common interest,
purpose, or passion, and held together by
routines and varying degrees of mutuality’
(Boggs and Rantisi, 2003; Bathelt and
Glückler, 2003; Amin and Cohendet, 2004:
74; Bathelt et al., 2004; Hess, 2004; Yeung,
2005a; 2005b). As such, it does not require
colocation for its benefits to be realized but
instead is a function of the degree to which
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individuals or firms are embedded within a
common socio-economic context (eg, in net-
works, a society, or both) and whether there
is an implicit and mutual understanding of the
roles, expectations, and norms for conducting
business together (Hess, 2004). In essence,
an agent’s ability to foster relational proximitywith another can be viewed as an important
first step toward the development of trusting
business ties as it is indicative of one’s knowl-
edge, legitimacy, or credibility in the context
of a business interaction.
Despite this recent turn, toward the
‘softer’ dimensions of networks and business
relations, some are skeptical about trust’s
conceptual and empirical utility and about the
ways in which geographers are applying it to
studies of innovation and regional develop-ment. Morgan (2005) expresses concerns
about what he sees as an ‘exaggerated’
emphasis on relational proximity as a factor
shaping learning and innovation and stresses
the importance of physical distance and
geographical proximity for such processes.
Mohan and Mohan (2002) question the
replicability and cost-effectiveness of studies
aimed at ‘spatially disaggregating’ compo-
nents of social capital such as trust. Instead,
they suggest that scholars focus on moregeneralizable and comparable (temporally and
crossregionally) forms of association (eg, par-
ticipation rates in civic organizations). Gertler
(2003) challenges conventional understand-
ings of the role of trust in tacit-knowledge
transfer and suggests that there is a need to
better understand trust’s specific contribu-
tion to innovation and learning in industries.
More broadly, Oinas (2002) expresses con-
cern about the abstractness of some of the
trust-related network studies and encourages
scholars to pursue more in-depth research
into the specific relationships between the
economic, the ‘non-economic’, and a firm or
region’s innovation and performance levels.
Mackinnon et al. (2002) express similar con-
cerns and stress the need for more compara-
tive, ethnographic, and rigorous investigations
into the precise relationships between
agglomerations, learning, and trust. Such cri-
tiques, perspectives, and concerns demon-
strate why there is a need for some rethinking
about how trust is conceptualized in eco-
nomic geography, both as a social phenome-
non or instrument that emerges from within
particular spaces and as a process facilitating(or obstructing) innovation, entrepreneur-
ship, and regional development.
III Conceptualizing trust –
transaction-cost, sociostructural,
and constructivist views
Rousseau et al. (1998) note that although
there are differences in the ways in which
trust is conceptualized, social scientists gen-
erally agree about its importance and utility in
risky or uncertain contexts.2
From a politicaleconomy and community development per-
spective, trust is a key contributor to civil
society, a factor granting legitimacy to gov-
ernments and political institutions, and an
indicator of social cohesion (Putnam, 1993;
2000; Platteau 1994a; 1994b; Fukuyama
1995; 2001; Knack et al., 1997; Woolcock,
1998; Lyon, 2000; Forrest and Kearns, 2001;
Li, 2004). Within economics, economic soci-
ology, and organizational theory, trust reflects
the alliance strategies used in interfirm andorganizational relations and agents (eg, entre-
preneurs) able to develop trusting relation-
ships can create information and exchange
opportunities unattainable to those more risk-
or trust-averse (Sako, 1992; 1998; Lane and
Bachmann, 1996; Hardin, 2001; Jessop, 2001;
Messick and Kramer, 2001; Yamagishi, 2001).
Beyond its political and economic contribu-
tions, others have documented how trust can
improve the quality and efficacy of environ-
mental and natural resource management
programs (Pretty and Ward, 2001; Adger,
2003; Carpenter et al., 2004).
From a conceptual perspective, much of
the overlap in the literature centers on the
importance of risk and the vulnerability of the
trusting agent since without them trust’s rele-
vance is marginal at best (Gambetta, 1988;
Mayer et al., 1995). Action is anticipated
James T. Murphy 431
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when trust is extended and the actions
enabled through trust encapsulate the inter-
ests of both the trusting agent and the trusted
agent (Dasgupta, 1988; Bradbach and Eccles,
1989; Lorenz, 1999; Hardin, 2001; 2002).
There is also recognition of the importance of
distinguishing between trust, a belief in theability of an individual to meet a mutually ben-
eficial expectation, and trustworthiness, a
trust-granting incentive (Mayer et al., 1995;
Hardin, 1996; 2002; Glaeser et al., 2000).
Moreover, numerous scholars have identified
different forms of trust (eg, trust based on
shared experiences or trust driven by institu-
tions) and documented their particular contri-
butions to exchange relationships, economic
development, innovation, and the constitu-
tion of networks (Luhmann, 1979; Zucker,1986; North, 1990; Sako, 1992; 1998;
Williamson, 1993; McAllistar, 1995; Becker,
1996; Cooke and Morgan, 1998; Nooteboom
et al., 1997; Doney et al., 1998; Humphrey and
Schmitz, 1998; Rousseau et al., 1998; Sako
and Helper, 1998; Pixley, 1999; Schmitz, 1999;
Sztompka, 1999; Hardin, 2001; Heimer, 2001;
Murphy, 2002; Ettlinger, 2003; Bathelt et al.,
2004; MacKinnon et al., 2004; Glückler,
2005). Despite the convergences, however,
there are significant differences in the ways inwhich trust is conceptualized and operational-
ized in the literature. The discussion that fol-
lows organizes these conceptualizations into
three broad categories: 1) trust as a rationally
calculated and transaction-cost reducing input
for exchange relationships; 2) trust as a struc-
turally embedded characteristic of inter- and
intra-organizational relations; and 3) trust as
an emergent phenomenon constructed
through social performances. It is important to
note that these categorizations are meant to
be heuristic, not necessarily mutually exclu-
sive, as many believe that trust exhibits a
combination of these characteristics.
1 Trust as a transaction-cost reducing input
for exchange relationships
Proponents of transaction-cost explanations
view trust as a rationally constructed
governance mechanism that enables agents
to conduct repeated transactions more effi-
ciently despite there being incomplete infor-
mation about the true intentions of others.
Three underlying issues create a need or jus-
tification for trust: 1) the bounded rationality
or limited information that constrains thedecision-making capabilities of individuals; 2)
the value of trust as a highly specific asset
that improves the efficiency of particular
transactions; and 3) the potential for oppor-
tunistic behavior by the other agents in a
transaction (Williamson, 1993). In general,
trust is conceptualized at two scales, as a
rationally calculated input at the micro (indi-
vidual) scale or as a macro-scale phenomenon
enabled through the presence of effective
governance structures in an economy or soci-ety. In both cases, the focus is on what
Granovetter (1985) calls ‘functional trust’;
trust that serves a distinct utilitarian role in
governing the relationships between individu-
als and firms.
In the first perspective, trust is viewed as
an individualized and rationally based input,
sunk transaction cost, form of capital, com-
modity, or ‘lubricant’ that facilitates the deci-
sion-making processes of individuals (Arrow,
1974; Dasgupta, 1988; Lorenz, 1988; DeiOttati, 1994; Berger et al., 1995;
Bhattacharya et al., 1998; Dimaggio and
Louch, 1998; Fafchamps, 2001). Actors make
(boundedly) rational choices to trust others
based on a desire to reduce the transaction
costs involved in searching for information,
screening potential business partners, moni-
toring contract compliance, and/or mobilizing
resources (Dasgupta, 1988; Williamson,
1993; Dei Ottati, 1994).3 In essence, trust is a
calculated outcome of relations that emerges
when a threshold is reached beyond which
trust becomes a rational choice (Lorenz,
1988; 1999; Gambetta, 1988; Nooteboom,
1999; Jeffries and Reed, 2000; Bohnet et al.,
2001). Once trust has been invested in it is
rational for actors to continually rely on or
draw from relationships where it is present
(Dei Ottati, 1994; Fafchamps, 2001). This, in
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turn, helps to stabilize production systems
and can make it difficult for newcomers, even
if they have price, information, or cost advan-
tages, to intervene or tap into networks and
relationships where trust is well established.4
The second transaction-cost driven
approach focuses on the development of theinstitutions, norms, and property rights that
increase the general level of trust in a society
or economy. Scholars of the ‘new’ institu-
tional economics commonly address this
perspective and view trust as being an
evolutionary outcome or byproduct of history
(North, 1990; Dimaggio and Powell, 1991;
Platteau, 1994a; 1994b; Fukuyama, 1995;
2001). Effective institutions, manifest as gov-
ernance structures that reduce the transac-
tion costs associated with economicrelationships, help create an environment of
trust by protecting property rights and pre-
venting cheating, opportunism, or defection
(North, 1990; 1996; Ensminger, 1997; 2001;
Dasgupta, 1988; Rowthorn, 1999; Peng,
2004). In contrast to the first transaction-
cost perspective, trust is a generalized char-
acteristic of a society or industry and
emphasis is placed on understanding how
political, economic, and social agencies and
actors can foster the development of trust-worthy institutions (eg, property rights, con-
tracts, or legal systems) that encourage
innovation, entrepreneurship, and investment
(North, 1990; Sako, 1992; Landa, 1994;
Misztal, 1996; Knack et al., 1997; Hodgson,
1998; Temple and Johnson, 1998; Ensminger,
2001; Helmsing, 2001).
While the transaction-cost literature
demonstrates how trust can reduce long-run
costs and improve performance, it does not
sufficiently address the contingent, reflexive,
affective, and ideological forces influencing
collaborative activities or the inevitable power
differentials shaping network configurations
and the prospects for trust (Beckert, 2002;
Mollering, 2002; Ettlinger, 2003; Murphy,
2003). Moreover, contextual realities are
often poorly accounted for in these studies,
particularly when scholars apply probabilistic
or game-theory methodologies to explain
how trust decision-making processes occur.
Such approaches, while successful in
accounting for some of the transaction-spe-
cific ingredients that may lead to trust, and in
achieving statistically rigorous analyses relat-
ing trusting outcomes to causal factors, ulti-mately provide relatively little information
about the role of space, place, and context in
shaping trust-building processes and percep-
tions of trustworthiness.
2 Trust as an embedded structural
characteristic of organizations and networks
In contrast to the transaction-cost perspec-
tives, where trust is a rationally calculated
input that facilitates risk taking and collabora-
tion by individuals, organizational theoristsand economic sociologists generally view
trust as a structurally embedded asset or
property of relationships, organizations, and
networks that helps to mobilize resources,
enable cooperation, and shape interaction
patterns within economies, industries, and
firms (Granovetter, 1985; Lane, 1998).5 Trust
is an organizing principle for business net-
works and a key ingredient for long-run eco-
nomic performance (Zucker, 1986; Powell,
1990; Uzzi, 1996; McEvily et al., 2003).6
Embedded or trusting ties offer advantages
over ‘arms-length’ (non-trusting) ties since
they can facilitate the transfer of idiosyn-
cratic, context-specific, or restricted forms of
information and thus increase the adaptability
and flexibility of firms and organizations
(Uzzi, 1997; Darr and Talmud, 2003; Uzzi
and Lancaster, 2003). Trust, beyond enabling
the flow of ‘thicker’ forms of information,
structures and stabilizes networks, con-
tributes significantly to performance and risk
management, and increases knowledge shar-
ing and cooperation (Uzzi, 1997; Bigley and
Pearce, 1998; Dimaggio and Louch, 1998;
Mizruchi and Stearns, 2001; McEvily et al.,
2003). Despite trust’s generally positive con-
tributions to economic development, organi-
zational theorists have also observed how it
may lead to detrimental outcomes if it is
James T. Murphy 433
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excessively exclusionary and leads to net-
works that are resistant to change, unable to
absorb new innovations, or concerned with
illicit, illegal, or cartel-like activities (Baker
and Faulkner, 1993; Baker et al., 1998).
The strength of these studies lies in the
empirical links the authors make betweenrelational characteristics and the entrepre-
neurial potential or innovativeness of firms,
organizations, and individuals. While such
contributions are undoubtedly significant, the
focus on patterns and structures, instead of
the processes leading to them, offers limited
insight into how trust actually emerges in
relational settings. Trust-building processes
are often implicitly or explicitly assumed to be
driven by the need to reduce long-run trans-
action-costs (see, for example, Kramer andTyler’s 1996 volume) and beyond such
assumptions there is limited consideration of
the power asymmetries and micro-social
mechanisms that influence trust and which
shape network structures (Emirbayer, 1997;
Emirbayer and Mische, 1998; Bachmann,
2001). Ultimately, network conceptualiza-
tions in their present forms only ‘sparsely’ sit-
uate relations within the context of wider
structural factors (eg, politics and regulatory
environments), individual meaning systems,and the social interactions that perform and
sustain them in real places and spaces in the
global economy (Fligstein, 1996; Knorr-
Cetina and Bruegger, 2002; Sheller, 2004;
Peck, 2005).
3 Affecting trust – constructivist
views on trust
A third area of the literature views trust more
as a social outcome and focuses on how
agents construct trust through communica-
tion and interpersonal negotiation. Although
calculations may play a significant role in such
processes, there is an explicit accounting for
and engagement with the role of cognitive,
emotive, communicative, and contextual fac-
tors in enabling trust to develop (Jones, 1996;
Hardy et al., 1998; Burke and Stets, 1999;
Jarvenpaa and Leidner, 1999; Kavanagh and
Kelly, 2002; Veenstra, 2002; Elsbach, 2004;
McEvily and Zaheer, 2004). Trust is not a
rational choice per se but rather a moral and
subjective construct that emerges when one
agent complies with the expectancies of a
relationship and when one’s self identity (ie,
his or her perceived social role) is recognizedand verified by the other (Garfinkel, 1967;
Goffman, 1969; Hosmer, 1995). As Burke
and Stets (1999) note, trust may be viewed as
the stage of a relationship that emerges
between self-verification and emotional
attachment.
In much of this literature, emotions and
symbolic affectations are seen as key factors
contributing to social cohesion, collaborative
behavior, and the strengthening of pre-exist-
ing forms of trust (Collins, 1981; McAllistar,1995; Messick and Kramer, 2001; Ettlinger,
2003; Cook et al., 2004). Feelings or emo-
tional energies may be associated with
symbolic representations of morality, trust-
worthiness, or honesty and an agent’s ability
to control his or her emotions, in accordance
with the norms associated with a social situa-
tion, increases the probability that trust is
achieved (Hosmer, 1995; Jones, 1996;
Hardin, 2001; Yamagishi, 2001).7 For exam-
ple, empathy is an emotional response thatcontributes to trust building practices
(Messick and Kramer, 2001; Cook et al.,
2004) and an individual’s group membership
(ie, how they communicate a specific social
identity) may foster feelings that facilitate or
prevent the emergence of trusting sentiments
(Williams, 2001).
Constructivist perspectives add a signifi-
cant dimension to our understanding of the
trust-building process by drawing attention to
the realities and subtleties of the social inter-
actions through which trust or trustworthi-
ness may emerge. Unfortunately, however,
most theorizations of trust in the economic
development and social capital literature do
not sufficiently draw from these perspectives
focusing instead on trust as a rationally (and
often acontextually) calculated social out-
come or on how trust, as an input, shapes the
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structural configurations of networks and
organizations. Because of this, relatively few
studies address the ways in which trust and
trustworthiness are actually ‘performed’
through affective displays and symbolic forms
of communication in real places or technolog-
ically mediated spaces (eg, the internet,videoconferencing). If we are more thor-
oughly to understand trust’s sociospatial
dimensions, there is a need to contextualize
not only the rationalities, social structures,
and logics that enable agents to act in a trust-
worthy manner (or to grant trust to others)
but also the attitudes, feelings, props, and
visual cues that are mobilized in the process of
constructing trust.
In assessing the trust literature as a whole,
particularly its relevance for economic geog-raphy, two issues stand out. First, while trust
is clearly recognized as an important factor
influencing the structure of networks, the
social characteristics of economies, and the
prospects for innovation in firms and indus-
tries, it remains somewhat static in its con-
ceptualization. Trust is viewed primarily as a
sunk cost, an investment, a relational asset,
or a social construct that strengthens a rela-
tionship or a network’s structure (for better
or worse) in a consistent or predictable man-ner. As such, most conceptualizations of trust
inadequately operationalize the dynamic
social processes that lead to its emergence
and lack sensitivity to the role of place, space,
or context in influencing the behavioral
choices agents make when assessing or
demonstrating trustworthiness. Second,
power is surprisingly absent from most con-
ceptualizations of trust’s development or
application. Trust is typically viewed as a phe-
nomenon distinct from power and one which
represents a neutral or balanced outcome of
social negotiations. In other words, the indi-
viduals involved in trust’s creation have cer-
tain (appropriate) expectations met that are
mutually agreed to and directly proportional
to the level of trust between them. Missing
from such accounts are the inevitable power
differentials that agents mobilize as means for
achieving coordination or control of another’s
behavior. As Allen (1997) observes, the exer-
cise of power is about more than simply con-
straining or dominating others and can be
viewed in terms of the ‘inscribed capacity’ of
individuals or institutions, as a ‘resource for
achieving diverse ends’ (p. 62), or as a mobileor diffuse ‘series of strategies, techniques and
practices’ (p. 63) that can be productive as
well as destructive in their application.
Theorizations of trust need to explicitly
account for the contributions of power if they
are more accurately to depict the sociospatial
mechanisms that lead to collaborative and/or
socially embedded relationships.
To address these concerns, this paper
advances a power-, space-, and process-sen-
sitive conceptualization of trust, one whichviews it as a dynamic, contingent, and situ-
ated social process, not simply as an endpoint
of interpersonal negotiations or an input into
economic relations. The focus here is on the
mechanisms and practices of trust-building
and, indirectly, the means through which
trust institutionalizes or embeds relationships
within and between particular spaces and
places in the global economy. Drawing inspi-
ration from actor-network theory, the social
psychology literature, and recent develop-ments in economic geography on the relation-
ality, embeddedness, and social construction
of economic space (eg, Lee, 2002; Hess,
2004; Hudson, 2004; and Yeung, 2005a;
2005b), trust is conceptualized as a social
process shaped by actors’ performances,
human and non-human intermediaries, and
the power differentials between interacting
agents; one which is situated in relation to
specific geographical contexts and economic
logics for exchange and interaction. By doing
so, the conceptual framework demonstrates
why it is imperative spatially and tempo-
rally to situate micro-social practices like
trust building if we are to better understand
how phenomena such as clusters, interfirm
networks, value chains, and regional
economies are created, transformed, and
sustained.
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IV New directions in trust research –
actor-network theory and social
psychology
In linking the literature to concerns about
how trust-building processes influence the
spatial dimensions of networks and regional
economies, two conceptual perspectives areparticularly useful – actor-network theory
(ANT) and scholarship from social psychol-
ogy, ethnomethodology, and symbolic inter-
actionism.8 ANT is significant because of its
focus on the role of technologies, materials,
and power differentials as factors shaping the
constitution of network spaces; spaces char-
acterized, in part, by varying degrees of trust
and distrust. The social psychology literature
is helpful because of its concern with the real-
world performances and interactions thatlead to outcomes such as trust or trustwor-
thiness. The ANT and social psychology liter-
atures are briefly reviewed below with an
emphasis on linking key theories or perspec-
tives from these fields to conceptual ideas
about how trust is constituted and enacted in
space.
1 Actor-networks and the
trust-building process
Actor-network theory is fundamentally con-cerned with the power relationships and asso-
ciations that lead to stabilized social and
economic practices, networks, scientific
knowledge, innovations, and/or institutional
structures. A key idea is that economies, mar-
kets, laboratories, communities, etc are, in
actuality, constituted by particular combina-
tions of human agents, non-human interme-
diaries, and power expressions that enable
actors to set agendas, define roles and identi-
ties, build alliances, and mobilize resources
(Callon, 1986; 1999; Latour, 1986; 1993; Law,
1986; 1992; 1994; 1999). Actors are them-
selves networks, constituted not only by their
cognitions and senses of self-identity but also
by the ‘set of elements (including, of course, a
body) that stretches out into the network of
materials, somatic and otherwise, that
surrounds each body’ (Law, 1992: 384).
Actor-networks are thus relational entities
shaped by power asymmetries and consti-
tuted by the chains of interactions or links
between/among heterogeneous materials (ie,
both human subjects and non-human
objects). Agency is an important concern
here, particularly in its relationship to actors’definitions of themselves and in how agents
interpret and utilize knowledge and artifacts
in relational settings (Murdoch, 1995; Smith-
Doerr and Powell, 2005). An agent success-
fully translates his or her power into desired
actions and outcomes through the building up
of alliances and by enrolling or ordering het-
erogeneous materials in his or her network.
As Murdoch (1995) observes:
In order for an actor successfully to enroll
entities (human and non-human) within anetwork, their behavior must be stabilized andchanneled in the direction desired by theenrolling actor. This will entail redefining the
roles of the actors and entities as they comeinto alignment, such that they come to gainnew identities or attributes within thenetwork. It is the intermediaries . . . which actto bind actors together, ‘cementing’ the links.
(Murdoch, 1995: 747)
Beyond addressing issues of agency and
power, proponents of ANT view it as a valu-
able tool for unpacking and understanding thematerial ‘wheres’ of interactions, the means
through which agents ‘act at a distance’ (ie,
extra-locally) on one another, and the social
and cognitive spaces where performances
occur and relationships are embedded and
‘ordered’ (Law, 1986; Latour, 1987; Mol and
Law, 1994; Murdoch, 1995; 1997; 1998;
Sheppard, 2002; Hess, 2004).
When viewed in relation to ANT, trust
and trust-building processes are important
resources or means for enrolling human
agents in networks and thus for stabilizing
associations of heterogeneous materials.
While certainly related to and influenced by
power relations, trust may serve as a tool for
translation or a means for ‘cementing’ the
links that bind agents together in networks.
ANT can thus contribute to our under-
standing of trust by providing a theoretical
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framework through which the materials,
intermediaries, and agents that engender
trust may be situated within the times, con-
texts, and spaces where interactions occur. In
doing so, it may be possible to identify and
catalog some of the place-specific practices
and elements that enable (or prevent) trust to(from) emerge (emerging) in a network. In
essence, trust can be viewed as a means
through which actor-networks are extended
across time and space consequently enabling
economic agents (eg, firms or entrepreneurs)
to develop and stabilize relationships for
learning, innovation, and productivity. As
Harrisson et al. (2001) note:
[ANT] helps to identify actors involved in aninnovation and how they succeed in extending
the network, who participates and why, who’sopposed and why, and what should be done towin the support of resistant actors. (Harrisson et al., 2001: 219)
In a sense, resistance or support may be a
function of the degree to which an actor cre-
ates a sentiment of trustworthiness in the
minds of others.
For example, in Murdoch’s (1998) analysis
of ANT’s spatial applications, he distinguishes
between spaces of prescription – where
appropriate actions, materials, and behaviorare relatively durable and fixed – and spaces
of negotiation – where the network is more
fluid, contested, and continually being
adjusted. In the first case, trustworthiness
may be associated with one’s adherence to a
well-defined and established set of norms,
conventions, and routines associated with
institutional forms of trust (eg, the activities
of currency traders; see Knorr-Cetina and
Bruegger, 2002). Moreover, because of this
fixity, durability, and standardization, actors
participating in such networks may find it pos-
sible to ‘act at a distance’more effectively. In
the second case, where the network is rela-
tively unstable and where identities, roles,
and attributes are still being negotiated and
contested, one can imagine that proximate
variables such as ascriptions, emotions, and
observed competence might play a more sig-
nificant role in determining who is and is not
trustworthy. In both cases, there are context
and goal-specific symbols, signals, materials,
technologies, and actions that can act as
intermediaries in or be relevant for trust-mak-
ing decisions. By focusing on the role of
agency in relation to a specific logic or ration-ale for action, and in a particular place and
time, ANT can effectively bring together the
combinations of elements that enable eco-
nomic and social actions to take place (Bruun
and Langlais, 2003).
2 The social psychology of trust building
ANT’s concern with empirical realism, power
relations, and the heterogeneity of networks
brings it into close contact with social psy-
chology, ethnomethodology, and symbolicinteractionism (Law, 1994; 1999). Scholars in
these fields have long recognized the impor-
tance of performance, social setting, reflexiv-
ity, and symbolic communication for
self-perceptions, individual and group identi-
ties, social exchange and practice, and the
construction of social and economic systems
(Cooley, 1902; Mead, 1934; Goffman, 1959;
1961; 1974; Schutz, 1964; 1967; Garfinkel,
1967; Blumer, 1969; Collins, 1981; Fine, 1992;
1993; Hermans et al., 1992; Richardson et al.,1998; Gergen, 1999; Hermans, 1999; 2001;
Lawler, 2001; Callero, 2003). Increasingly,
economic sociologists and organizational
theorists are applying ideas from this litera-
ture to studies of the micro-social mechanisms
shaping exchange relations, organizations,
markets, and commodity chains (Knorr-
Cetina and Bruegger, 2002; McEvily et al.,
2003; Rodan and Galunic, 2004). As interest
in the sociospatial dynamics of networks
increases, geographers too have begun to
engage with social psychology in quests for a
deeper understanding of the links between
context, performance, communicative prac-
tice, knowledge transfer, and the formation of
business alliances (Oinas, 1999; Thrift, 2000;
Bathelt and Glückler, 2003; Tracey and Clark,
2003; Bathelt et al., 2004; Storper and
Venables, 2004).
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Four ideas from social psychology are
especially relevant for the conceptualization
of trust-building processes. First, social inter-
actions are shaped by the frames, interpreta-
tive frameworks, or situational definitions
that agents mobilize or reference during a
particular encounter (Mead, 1934; Goffman,1959; 1974; Garfinkel, 1967; Blumer, 1969).
Such frames are a function of the logic behind
a social interaction and act, in essence, as
normative and ontological reference systems
that guide an individual’s behavior. Situational
definitions, when implicitly agreed upon by
agents, can lead to mutual understanding and
possibly the emergence of trust. However,
such understandings may have the opposite
effect when an agent recognizes a circum-
stance where opportunism on the part of another agent is likely or probable (eg, a con
game or swindle).
Second, social psychologists stress the
importance of accounting for reflexivity and
power asymmetries in social interactions and
are concerned with understanding the ways
in which individuals ‘objectify’ themselves as
social selves through role playing in relation to
a particular frame or situational definition
(Cooley, 1902; Thomas, 1923; Mead, 1934).
As Callero (2003: 127) notes, the self is ‘afundamentally social phenomenon, where
concepts, images, and understandings are
deeply determined by relations of power.’ In
essence, the social ‘who’ we are is in large
part a function of how much power we have
in the context of a particular situational frame
or definition. For example, individuals who
recognize that they have a superior power
position in an interaction (eg, a job candidate
screener) may be less concerned about
appearing good-natured or friendly while
those in inferior power positions (eg, a job
candidate) may make a more concerted effort
to be liked and to display positive emotional
expressions. Individuals consistently reflect
upon where they stand in an interaction and
make adjustments accordingly in order to
improve the prospects for achieving trust or
for understanding the degree to which
another may be trusted. Trust can emerge
when the trusted agent effectively realizes or
takes on the role of the social or professional
self viewed by the trusting agent as appropri-
ate for a particular interaction (Mead, 1934;
Blumer, 1969; Burke and Stets, 1999).
Third, in exploring the communicativeprocesses that shape social systems, social
psychologists often apply the notion of inter-
subjectivity, what Schutz (1967) and Knorr-
Cetina and Bruegger (2002) refer to as the
‘coordination of consciousness’between two
(or more) agents, to explain how speech acts,
social interactions, and performances lead to
mutual understanding. Habermas (1984) and
Zierhofer (2002) view intersubjectivity as a
critical mechanism for achieving communica-
tive rationality and/or the coordination of social action. Such an understanding occurs
when individuals’ interpretations of physical
reality, social norms and expectations, and
their personal thoughts, feelings, or perspec-
tives align in the process of proximate or non-
proximate (eg, telephone conversations)
communication (Schutz, 1967; Knorr-Cetina
and Bruegger, 2002; Ziehofer, 2002). As
Habermas (1984) observes:
what is paradigmatic for [communicative
rationality] is not the relation of a solitarysubject to something in the objective world,but the intersubjective relation that speakingand acting subjects take up when they come toan understanding with one another aboutsomething. In doing so, communicativeactors move in the medium of a natural
language, draw upon culturally transmittedinterpretations, and relate simultaneously tosomething in the one objective world,something in their common social world, andsomething in each’s own subjective world.
(Habermas, 1984: 392)
In applying the concept more directly to trust,
it is clear that interpretations of an individual’s
trustworthiness will be shaped, in part, by the
degree to which intersubjectivity is achieved
in the communicative process.
Fourth, social psychologists recognize the
importance of personal appearance and per-
formative space in determining what roles
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and actions are appropriate, acceptable, and
useful for achieving a specific objective or
outcome. Goffman (1959) views the personal
front and the setting as key elements of any
social performance and distinguishes between
front regions – where impression manage-
ment is crucial – and back regions – whereless formalized and structured encounters
take place. As Law (1994) observes in relation
to the activities of scientists at the Daresbury
laboratory:
Frontstage, there are bright-eyed, bushy-tailed
performances. And backstage there is all theeffort that goes into mounting thoseperformances. But the dualism is not onlyepistemological, but also moral. For what goeson frontstage is also a form of impression-
management, and it slides easily into
dissimulation [feigning], or suspicion of dissimulation. So it is that in enterprise thesyntax of performance gets divided from thesyntax of reality, and the need to perform
starts to erode the possibility of trust. (Law,1994: 176)
While performances ‘frontstage’ must convey
legitimacy, competency, trustworthiness,
and/or appropriateness, there is the danger
that such performances may be perceived
as acted or less meaningful expressions.
The point is that, while performances areundoubtedly important, trust does not
emerge through them alone as it is also
shaped by institutional structures and the cal-
culations, dispositions, and prior experiences
of individuals.
In sum, social psychology offers insights
into the ways in which actors define situa-
tions, conduct social performances, consti-
tute themselves and each other, and relate
observations of another’s behavior to their
subjective understandings of the world. In
relating these ideas to trust, space, and eco-
nomic development, there are two key
considerations that theories should address.
1) Where is the ‘frontstage’ and what are the
‘frontstage’ performances (ie, the impression
management strategies) that lead to trust in a
particular business situation? 2) How are inter-
pretations of ‘appropriate’ (ie, trust-inducing)
social selves influenced by where someone is
from and with who and where they normally
conduct business? In addressing these ques-
tions there is an implicit recognition of and
accounting for the socio-economic contexts
and performance spaces where trust is
constructed as such settings significantlyinfluence the situational frameworks, speech
acts, or behavioral assumptions deemed
appropriate.
Taken together, the ANT and social
psychology literatures offer theoretical and
methodological guidance for ways in which
we can more rigorously consider what
Hudson (2004: 457) terms the ‘processes and
interplay between the realms of the material,
the symbolic, and the social through which
the meanings of commodities are created,fixed, and reworked’. In this case, the ‘com-
modity’ might be viewed as trust but the
conceptual emphasis transcends the view
that trust is merely a resource or input for
socioeconomic relations. Instead, the focus is
on how social actors generate meanings
about what trust entails and how a stabilized
or fixed (at least temporarily) understanding
of its implications might lead to distinct eco-
nomic practices and outcomes. By applying
ANT and social psychology to examine thesocial processes that lead to the development
of trust, economic activities can be situated
within the discursive spaces where they
occur, not simply in terms of rational choices
and transaction-cost calculations. In doing so,
there is an explicit recognition of the ways in
which power is practiced, intermediaries are
mobilized, and social performances take place
through communicative processes and inter-
personal negotiations.
As Lee (1989; 1997; 2002), Hudson
(2004), and Yeung (2005a; 2005b) have
observed, the performance of economies and
firms is determined in large part by such rela-
tions and discursive practices as they enable
communication, offer direction, facilitate
evaluation, and, most significantly, lead to
shared understandings about who does what,
why, when, and where. Moreover, these
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social processes and negotiations shape the
spatial structures of firms and industries and
influence the prospects for innovation and
growth in regional economies. Beyond helping
to unravel some of the complexities, prac-
tices, and contingencies of inter-, intra-, and
extra-firm relationships, ANT and social psy-chology compel us to have a deeper under-
standing of, or appreciation for, the actual
contexts, spaces, and locations where net-
working occurs, trust emerges, and collabora-
tive institutions become embedded. The
remainder of the paper applies these litera-
tures, as well as key ideas from the extant
trust literature, to the development of a
heuristic conceptual framework for trust; one
that unpacks and details the cognitive, inter-
subjective, and structural factors influencingthe sociospatial process of trust building.
V Reconceptualizing trust-building
processes
The conceptual framework that follows
applies seminal ideas from the literatures
reviewed above to depict the sociospatial
process through which trusting relationships
emerge; one which will facilitate the ‘unpack-
ing’ of the dispositions, meanings, symbols,
norms, materials, spaces, and power relationsthat influence the decision-making processes
of individuals within particular relational
settings. Trusting relationships and network
connections are theorized here as ‘temporal-
relational’ fields which emerge from within
particular social, material, and political set-
tings and which are maintained and trans-
formed through the cognitions, symbolic
exchanges, and performances of the agents in
them (Collins, 1981; Emirbayer and Mische,
1998). These relational spaces may be
ephemeral, mobile, and highly fluid in nature
or they may be fixed, stabilized and embed-
ded in particular territories, networks, loca-
tions, or spaces through markets, cultural
systems, norms of participation, location-
driven contingencies, or established ties
between individuals (Mol and Law, 1994;
Hess, 2004; Sheller, 2004).9
Trust not only influences the quality or
strength of particular associations in a net-
work but also the network’s spatial extensive-
ness and openness to new participants and
ideas. Trust-building processes are commu-
nicatively driven and shaped by influences at
three scales – the micro (the subjective), themeso (intersubjective), and the macro (the
structural or institutional). These scales or
levels correspond to Emirbayer’s (1997)
model of the key dimensions of relational
thinking – individual-level identities, under-
standings, and embodiments (the micro
scale), face-to-face or person-to-person
encounters (the meso scale), and the norms,
values, identities, and institutions that are
embedded in a social system (the macro
scale). Moreover, these levels may be linkedto Humphrey and Schmitz’s (1998) typology
of micro-scale, meso-scale, and macro-scale
forms of trust. At the micro scale, trust is
constructed over time and through subjective
interpretations of shared experiences and the
competence of another agent. At the meso
scale, feelings of trust emerge through face-
to-face or person-to-person encounters and
on the basis of ascriptions, group member-
ships, or other characteristics the trusting
(distrusting) agent ascribes to or associateswith trustworthy (untrustworthy) individuals
(eg, race, religion, or appearance). Macro-
level trust is more generalized, derived from
institutionalized attitudes about the trustwor-
thiness of people, from religious or philosoph-
ical values, or from beliefs in the ability of
government or other institutions to protect
one’s rights should his or her trust be violated.
Ultimately, the decision to trust must
occur at the micro scale where agents evalu-
ate and consider the risks, benefits, perform-
ances, and institutions influencing a particular
exchange relationship or social interaction.
Trust emerges when there is congruence
between the trusting agent’s expectations
about appropriate roles in a given situation
and the actions performed by the trusted agent
(Goffman, 1961; Sztompka, 1999; Knorr-
Cetina and Bruegger, 2002; McEvily et al.,
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2003). Appropriateness is a function of fac-
tors at the micro (subjective or cognitive),
meso (intersubjective), and macro scale
(structural or institutional) and depends on
the trusting agent’s ‘definition of the situa-
tion’, a definition shaped by the logic or
rationale for the interaction. In the businessworld, such logics or rationales may relate to
material goods (eg, the need to access
resources through relations with a supplier),
technology or knowledge transfer processes,
or symbolic issues (eg, the desire to build a
reputation through relations with a cus-
tomer). When an agent pursues a particular
logic through an interaction, he or she acti-
vates an ‘interpretative framework’ that
influences how risks and rewards are calcu-
lated (the micro scale), how performances orencounters are evaluated (the meso scale),
and which norms, rules, laws, or conventions
(the macro scale) are referenced (Garfinkel,
1967; Goffman, 1969; Knorr-Cetina and
Bruegger, 2002).
Figure 1 summarizes how an interpretative
framework is constituted in relation to the
three scales. At the micro or subjective scale,
trust-building practices are influenced by an
individual’s disposition or general willingness
to trust, her perceived power or control of thesituation, her calculation of the risks and
uncertainties related to the extension of
trust, and her assessment of the rewards
associated with, or interests encapsulated
through, the actions derived from the estab-
lishment of trust. The meso or intersubjective
scale is constituted by the ‘personal front’and
the ‘setting’ (Goffman, 1959). The personal
front is constructed through the performanceor embodiment of speech acts, expressions,
gestures, emotional energies, and social cues
or significant symbols (Mead, 1934; Goffman,
1959; Blumer, 1969; Collins, 1981; Burke and
Stets, 1999; Lawler and Thye, 1999; Lawler,
2001). The setting relates to the physical loca-
tions and spaces within which or across which
the interaction occurs (eg, face-to-face, face-
to-screen) and the props, appearances, mate-
rials, and technologies that can mediate these
exchanges (Goffman, 1959; Knorr-Cetina andBruegger, 2002). At the macro scale, the role
of wider institutions, structural conditions,
circumstances, and hierarchies are accounted
for and these include the laws, norms, and
rules for conducting business, the value sys-
tems embodied in religious beliefs or political
ideologies, and the sanctioning institutions
(eg, the legal system) that can help an agent
respond to opportunistic behavior. Beyond
such institutions and structures, there is a
need to consider the positionality of the firmor individual within a wider society or the
global economy (Sheppard, 2002). Position
James T. Murphy 441
Figure 1 Conceptualizing the trust-building process
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might be related to or derived from social
class, market power, the location of the busi-
ness, or the firm’s position in a global value
chain. Finally, it is also imperative to account
for the influence of economic or industry-
specific circumstances and present-day struc-
tural or institutional realities (eg, conditionscreated by a dramatic economic reform
process or a political crisis) as influences on
trust’s potential development. Jones (1996),
using an extreme example, cites China’s
Cultural Revolution as a period or ‘climate’
when generalized distrust was the norm and
there were generally few incentives for trust-
ing others. Other, perhaps less extreme,
climate-influencing factors might relate to
place or region-specific changes in regulations
and laws, the general performance of marketsand industries, geopolitical issues, ethnically
driven or class-based conflicts, or natural and
human-created disasters.
In applying this conceptual framework to
empirical research it will be imperative to
obtain detailed descriptions from individuals
about how they develop and define trust in
relation to particular economic logics (eg, a
supplier relationship, customer relationship,
or a business alliance). In doing so, the role
and significance of micro-scale, meso-scale,and macro-scale factors can be elucidated in
terms of how they influence trust’s emer-
gence in a particular business relationship,
economic situation, and geographic context.
It is crucial to note, however, that while
recognizing and acknowledging the diverse
contributions of these factors remain impor-
tant, what is essential is the specific manner in
which they are collectively realized in a rela-
tionship or social encounter. As Mansfield
(2005: 472) recently asserted, scales are best
viewed as ‘dimensions’ of particular events
and processes ‘always produced in complex
interrelation with, and as aspects of, other
scales’. In linking this notion to the conceptual
framework presented here, micro-, meso-,
and macro-scale characteristics of trust-
building processes are not interlinked in a lin-
ear, hierarchical, or accumulative fashion, but
instead emerge in relation to one another and
to the sociospatial contexts where individuals
interact. Ultimately, the conceptualization’s
purpose is not to reduce or disassemble trust
into set of constitutive parts or components
but instead to demonstrate heuristically how
trust-building processes are complex, com-municatively driven, geographically contin-
gent, and inseparable from exercises or
structures of power and control.
VI Concluding remarks
Beyond applications of the conceptual frame-
work to examinations of how trust con-
tributes to innovation and knowledge creation
in clusters, learning regions, production net-
works, value chains, and urban economies,
three directions for future research are espe-cially intriguing. First, there is a need to under-
stand better the processes through which
crosscultural and crosscontextual business
alliances and relationships develop in the global
economy. Such research will be especially
important in determining how firms in devel-
oping and emerging economies can create
more durable and trusting transnational rela-
tionships to facilitate innovation and growth
(see, for example, Saxenian and Hsu, 2001).
Second, there is a need for more research intothe dynamics of collaboration and trust-build-
ing within non-embodied relational spaces,
particularly those enabled through information
and communication technologies (eg, the
internet). Knorr-Cetina and Bruegger’s (2002)
fascinating study is a prime example of
research in this regard as it illustrates how cur-
rency markets are in reality constructed
through global chains of interactions playing
out through responsive or face-to-screen
encounters between individuals situated in
offices all over the world. Third, the frame-
work can be applied to studies that focus on
the power asymmetries that shape collabora-
tive relationships in order to determine how
power is constituted within and influenced by
the social spaces where individuals interact
and the wider geographical contexts where
firms and industries are situated.
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In closing, it is important to stress that the
conceptualization presented here is intended
to be more than simply a collection of vari-
ables or influences on the trust-building
process. While accounting for the role of such
factors surely is important, the framework
also offers a means for considering and under-standing the ways in which collaborative
practices, trusting relationships, and network
associations are situated within distinct times,
places, and interactive spaces through partic-
ular combinations of materials, symbols,
social practices, and institutions. By situating
trust and collaboration in this manner, it may
be possible to shift away from static concep-
tualizations of sociospatial economic phe-
nomena (eg, agglomeration economies) to
more place-, space-, and process-sensitiveunderstandings of how value chains, clusters,
knowledge flows, and transnational alliances
are actually constituted. Issues of agency and
power shift to center stage and scale, while
relevant in a conceptual sense, is collapsed
into the context of a single association or net-
work relationship. Thus the conceptualiza-
tion’s broader significance lies not in
describing how factors at different scales
influence trust but rather in its unpacking of
trust in relation to the actual agents, spaces,and places where it emerges and in its contex-
tualization of the micro-social processes that
drive the relationships and networks that ulti-
mately constitute firms, industries, markets,
and economic regions. In doing so it can facil-
itate, through empirical research, a move
beyond solely instrumental conceptualiza-
tions of trust (ie, trust as lubricant, relational
asset, input, or sunk cost) and toward a
relational understanding of how the means for
establishing and sustaining collaborative
relationships influences the development
and potential of such ‘ends’ as clusters and
production networks.
Acknowledgements
The author would like to sincerely thank
Roger Lee and three anonymous reviewers
for their thoughtful and highly constructive
comments on earlier drafts of the manuscript.
The usual disclaimers apply.
Notes1. Two recent examples demonstrate these
sorts of contributions. First, Ettlinger (2003)
shows why it is important to account fortrust’s different forms or sources (eg, trust
based on capacity or trust based on feelings)
in order to understand better how and why
discriminatory (or more equitable) manage-
ment practices emerge within particular
workplaces. Second, Mackinnon et al. (2004)
in their study of the Aberdeen oil industry,
find that local reputation and credibility, what
they consider lower-level forms of trust, play a
greater role in the development of extra-local
business relationships than they do in the
establishment of local information and knowl-
edge transfer networks.
2. As Rousseau et al. (1998) note, economists
generally view trust as a rationally calculated
risk, psychologists as an internal cognition,
and sociologists as a socially embedded prop-
erty of relationships.
3. Williamson (1993) argues that rationally
calculated trust is really a form of risk taking,
not trust as he understands it. For him, real
trust can only be personal and emotional
(eg, the trust we have in people we love) or
‘hyphenated’ (eg, the trust we have in politi-
cal, cultural, social, or economic institutions).4. Methodologically, studies of trust from this lit-
erature often involve surveys and statistical
analyses of the key factors driving trust deci-
sions (eg, reputation, experience, etc), game
theory studies using prisoner dilemma-type
methods to assess trust-making probabilities,
or experimental trust games with real people
(Butler, 1991; Nooteboom et al., 1997;
Bhattacharya et al., 1998; Glaeser et al., 2000;
Bacharach and Gambetta, 2001; Buchan
et al., 2002; Barr, 2003; Carpenter et al.,
2004).5. For a more thorough assessment of per-
spectives on trust from economic sociology
and organizational theory, see Kramer
and Tyler’s (1996), Lane and Bachmann’s
(1998), and Kramer and Cook’s (2004) edited
volumes.
6. Beyond assessing trust’s structural contribu-
tions to organizations, networks, and market
James T. Murphy 443
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institutions, organizational theorists and eco-
nomic sociologists have also explored the
complementary relationships between trust
and distrust, the fuzzy boundaries between
trust, control, and power, the communicative
dimensions of trust-building processes, trust’s
importance for leadership, and the role of
institutions, histories, and cultures as influ-
ences on trust’s constitution (Lane and
Bachmann, 1996; Das and Teng, 1998; Doney
et al., 1998; Lewicki et al., 1998; Bachmann,
2001; Reed, 2001; Kramer and Cook, 2004).
7. An alternative perspective on the role of emo-
tions views them as rationally constructed
instruments, objects, expressions, gestures,
or symbols that influence the dynamics of
social interactions and foster the emergence
of specific social patterns in a society
(Kemper, 1978; Heise, 1979; 2005; Frank,
1988; Lawler et al., 2000).8. Throughout most of the remainder of the
paper the social psychology, ethnomethodol-
ogy, and symbolic interactionism literatures are
referred to collectively as social psychology.
9. A highly fluid space might entail the
interactions between people in a subway car or
through a mobile communication device while
a more fixed and stabilized space would be a
boardroom or the shop floor of a manufactur-
ing plant. See Sheller (2004) for a helpful
discussion on the increasing importance of
technologically mediated and highly fluid inter-active spaces in contemporary cities.
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