Governmental Agency and Trust in the Formation and Transformation of Interorganizational Entrepreneurial Networks

Abstract:     
This paper critically examines the role of trust and government agency in the creation of artificial industrial districts by means of 'instructing' clusters of companies in specific geographic areas to form entrepreneurial networks in order to obtain a public subsidy. The paper is based on a multiple-case approach involving five in-depth case studies, using a focal company perspective. In particular, we examine how these trajectories are influenced by trust. The findings reveal that trust plays a major role in the formation and continuance of interorganizational cooperation, and that the absence of trust results in discontinuation. The study further shows how government agency may unintentionally ruin existing, well-functioning and interorganizational networks.

Keywords: trust, governmental agency, industrial districts, interorganizational cooperation

JEL Classification: L52, O31, P41, R11, R12

Accepted Paper Series