Comparative institutional study shows that buyer-supplier trust depends heavily on external legal and social structures, indicating that business cooperation requires institutional foundations.
Trust is analysed as a means to reduce uncertainty and risk in vertical inter-firm relationships. Both theoretically and with reference to empirical comparative research (Britain and Germany), it is shown that trust-based relations between buyer and supplier firms rarely evolve spontaneously on the level of individual interaction but are highly dependent on the existence of stable legal, political and social institutions.
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Lane et al. (1996) studied this question.
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