Building Trust: A Matter of Proximity?
Frontiers of Entrepreneurship Research 2007
12 Pages Posted: 6 Dec 2007
This paper brings the concepts of proximity and trust empirically together in order to gain insights in their relationship in the context of resource deficient young, technology-based firms and its key partner network. More specifically, we examine the influence of cultural, cognitive and social proximity on the level of interorganizational trust between young, technology-based firms and its key partners. Using a dataset of 290 relationships between young, technology-based firms in Flanders and their key partners, we find that each of the three concepts of proximity has a significant impact on the level of interorganizational trust. Further, we find that the influence of cognitive proximity on interorganizational trust diminishes over time. These results indicate that proximity between young, technology-based firm and its key partners influences the level of trust in the relationship.
JEL Classification: M13
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