The determinants of interfirm trust are examined in 453 supplier automaker relationships in theU.S., Japan, and Korea. The findings indicate high supplier trust emerges when (1) suppliersreceive assistance from the automaker, (2) the automaker has a track record of maintaining acontinuing (repeated) exchange relationship with the supplier. Although there were somedifferences across institutional environments, notably higher trust in Japan, the findings are robustacross the three institutional environments. Indeed, in a sample of U.S. suppliers that workedwith both U.S. and Japanese automakers in the United States, we found that Japanese automakerswere more effective than U.S. automakers at building trusting relations with U.S. suppliers.Thus, firm level practices appear to be more important than the institutional environment in thedevelopment of interfirm trust.A central issue in the literature on strategic alliances and interfirm cooperation is how firms createtrust and control opportunism, particularly when the transactors have made investments intransaction specific assets.Under these conditions, trust has been described as an important antecedent to interorganizationalcooperation and economic efficiency (Sako, 1991; Smith, Carroll, and Ashford, 1995). In fact,recent research suggests that trust in supplier buyer relations may be an important source ofcompetitive advantage because it: (1) lowers transaction costs and allows for greater flexibility torespond to changing market conditions (Dore, 1983; Sako, 1991; Barney & Hansen, 1995; Dyer,forthcoming), (2) facilitates investments in special purpose assets and technologies which enhanceproductivity (Asanuma, 1989; Lorenz, 1988; Dyer, 1994), and (3) leads to superior informationsharing routines which improve coordination and joint efforts to minimize inefficiencies (Fruin,1992; Clark & Fujimoto, 1991; Nishiguchi, 1994). Moreover, some scholars claim that nationaleconomic efficiency is highly correlated with the existence of a high trust institutional environment(North, 1990; Casson, 1991; Hill, 1995; Fukuyama, 1995). For example, Fukuyama (1995:7)argues that the economic success of a nation, "as well as its ability to compete, is conditioned bythe level of trust inherent in the society." The findings from these, and other, studies haveincreased our attention on the important role of trust in economic exchanges.A natural response to these studies has been to exhort companies to build trust with their tradingpartners (Business Week, 1986, 1992) and to call for increased research on the role of trust incoordinating economic activity (Smith, Carroll, and Ashford, 1995). However, before an explicitstrategy for developing trust can be developed, or considered feasible, the determinants of trustmust be identified. Despite considerable academic and managerial interest in trust between tradingpartners, to date there has been little empirical research on the antecedents or determinants ofinterorganizational trust (i.e. between supplier buyer). Further, there has been little research onwhether the determinants of trust differ in different institutional (i.e. country) environments.The purpose of this paper is to examine the determinants of supplier trust in a sample ofsupplier/automaker relationships in the United States, Japan, and Korea. Given the recent attentionon the importance of trust in exchange relationships, an examination of the determinants of trust is,by itself, a valuable undertaking. However, due to the globalization of industries and a dramaticincrease in international joint ventures, a study of the determinants of trust in different institutionalenvironments is particularly valuable. Such a study is useful because it allows for an examinationof those factors that are important determinants of trust both within, as well as across, countries.