Formal and Relational Mechanisms of Network Governance and Their Relationship with Trust: Substitutes or Complementary in Brazilian Real Estate Transactions?

Carnaúba, A., Boaventura, J., Costa Pereira, C., Azevedo, A. and Todeva, E., (2020) Formal and Relational Mechanisms of Network Governance and their Relationship with Trust: Substitutes or Complementary in Brazilian Real Estate Transactions? International Journal of Networking and Virtual Organisati

21 Pages Posted: 12 Feb 2021

See all articles by Adriano Augusto Carnauba

Adriano Augusto Carnauba

Brazil’s Developments Bank (BNDES)

Joao Boaventura

University of Sao Paulo

Cristina Espinheira Costa Pereira

Universidade Paulista - UNIP

Ana Azevedo

University of Sao Paulo

Emanuela Todeva

Business Clusters, Networks and Economic Development

Date Written: January 01, 2020

Abstract

The objective of this study was to investigate whether formal and relational mechanisms of network governance act as substitutes or are complementary in their relationship with trust in the intermediation activity of real estate transactions. We conducted a quantitative study to test the hypotheses. We collected data via a survey and the context was Brazilian real estate business networks. We used a non-parametric approach to investigate the associations among the key variables indicated in the theory. The results confirm the hypothesis that formal and relational mechanisms of network governance act as complementary and reject the possibility of substitution between them. Both mechanisms are important to build trust-based relationships between actors, and formal governance mechanisms have a significant positive relationship with interorganisational trust, while relational mechanisms are positively associated with interpersonal trust. This study not only contributes to the discussion on governance mechanisms and their relationship with trust, but also broadens this debate by considering trust at different levels and in more complex structures where these relationships are still barely explored, such as is the case of business networks.

Keywords: Network; Mechanisms of Governance; Trust; Inter-Organisational Relationships; Real Estate Network; Brazil

JEL Classification: A14; D21; D23

Suggested Citation

Carnauba, Adriano Augusto and Boaventura, Joao and Costa Pereira, Cristina Espinheira and Azevedo, Ana and Todeva, Emanuela, Formal and Relational Mechanisms of Network Governance and Their Relationship with Trust: Substitutes or Complementary in Brazilian Real Estate Transactions? (January 01, 2020). Carnaúba, A., Boaventura, J., Costa Pereira, C., Azevedo, A. and Todeva, E., (2020) Formal and Relational Mechanisms of Network Governance and their Relationship with Trust: Substitutes or Complementary in Brazilian Real Estate Transactions? International Journal of Networking and Virtual Organisati, Available at SSRN: https://ssrn.com/abstract=3747177

Adriano Augusto Carnauba

Brazil’s Developments Bank (BNDES) ( email )

Rua Juiz Goulart Monteiro, 07
Rio de Janeiro, RJ-2423037
Brazil

Joao Boaventura

University of Sao Paulo ( email )

Av. Prof. Luciano Gualberto 908
São Paulo SP, São Paulo 05508-900
Brazil

Cristina Espinheira Costa Pereira

Universidade Paulista - UNIP ( email )

Sao Paulo, SP
Brazil

Ana Azevedo (Contact Author)

University of Sao Paulo ( email )

Rua Luciano Gualberto, 315
São Paulo, São Paulo 14800-901
Brazil

Emanuela Todeva

Business Clusters, Networks and Economic Development ( email )

London
United Kingdom

HOME PAGE: http://www.bcned.co.uk

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