Endogenous and Exogenous Determinants of Trust in Inter-Firm Relations : A Conceptual Analysis Based on Institutional Economics

This paper investigates the factors that affect the availability and robustness of trust as a governance mechanism in inter-firm relations. By adopting a broad ‘embedded' perspective, the analysis focuses both on the factors that affect trust within the inter-firm relation (endogenous determinants) and those related to the business environment that influence trust from the outside (exogenous determinants). By means of conceptual analysis based on a broad literature review focusing on institutional economics, the aim of the paper is to provide an overview that can be used as a basis for further theoretical discussion and operationalisation in empirical research especially concerning the governance of inter-firm relations in different sectoral and regional environments. For the purpose of illustration, the paper concludes with an example of a conceptual model that applies the concepts analysed in the paper