building trust in economic space

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DOI: 10.1191/0309132506ph617oa

2006 30: 427Prog Hum Geogr James T. MurphyBuilding Trust in Economic Space

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Progress in Human Geography 30, 4 (2006) pp. 427–450

© 2006 SAGE Publications 10.1191/0309132506ph617oa

I Introduction

Extensive scholarship in economics, eco-

nomic sociology, organizational theory, and

economic geography has demonstrated how

the innovativeness, performance, and com-

petitiveness of firms and industries areinfluenced by social context and the ability of

economic agents to develop networks and

mobilize relational resources for information

acquisition, learning, and exchange relations

(Granovetter, 1985; North, 1990; Burt, 1992;

Putnam, 1993; Amin and Thrift, 1993; Uzzi,

1996; Storper and Salais, 1997; Cooke and

Morgan, 1998; Cooke and Wills, 1999;

Malecki, 2000; Helmsing, 2001; Scott, 2002;Scott and Storper, 2003). Despite the signifi-

cant contributions of this literature, geogra-

phers are still grappling with ways better to

Building trust in economic space

James T. Murphy*

Graduate School of Geography, Clark University, 950 Main Street, Worcester,

MA 01610-1477, USA

Abstract: While there is widespread recognition of the importance and role of trust in facilitating

regional development, technology transfer, and agglomeration economies, the concept remains

rather undertheorized within economic geography and regional science. This paper reviews and

assesses the literature on the role and constitution of trust for economic and industrial

development and presents a conceptualization of the trust building process that accounts for theinfluences of agency, institutions, materials, and interpersonal expression. In doing so, geographic

concerns about the role of space and context are linked to economic and sociological

conceptualizations of trust and to scholarship from actor-network theory (ANT) and social

psychology regarding the influence of power, non-human intermediaries, and performance on

social outcomes and network configurations. The result is a heuristic framework for analyzing

trust-building processes as temporally and spatially situated social phenomena shaped by context-

specific subjective, intersubjective, and structural factors. The conceptualization’s broader

significance lies not in detailing the many factors that influence trust but in its contextualization of

the micro-social processes that can strengthen business relationships. In doing so, the framework

can facilitate a move beyond solely instrumental conceptualizations of trust and toward a

relational understanding of how the means for establishing and sustaining trust influence the

development and potential of such ‘ends’as clusters and production networks.

Key words: actor-network theory, economic geography, networks, power, social capital, social

psychology, trust.

*Email: [email protected]








theorize and empirically assess the sociospa-

tial contexts, dynamics, and interactions that

constitute learning processes, knowledge

transfer systems, clusters, global production

networks, and regional economies (Angel,

2002; Sheppard, 2002; Dicken, 2004;

Morgan, 2005; Peck, 2005; Yeung, 2005a).The spatial characteristics and social patterns

of these phenomena are well documented

but there remains much to be learned about

the social, economic, and spatial processes

through which firms, industries, cities, and

regions achieve the economies of scope or

scale necessary to become successfully inte-

grated into global markets, capital circuits,

and knowledge flows. Moreover, recent con-

ceptual developments (eg, institutional thick-

ness, communities of practice, relationalproximity, or learning regions) remain, to

some, ‘fuzzy’, vague, or difficult to apply from

a policy-making perspective (Markusen, 1999;

Martin and Sunley, 2001; Morgan, 2005). All

told, there is a need to establish more rigorous

links between micro-social interactions (eg,

trust-building processes), meso-level struc-

tures (eg, industrial districts or clusters), and

macro-scale phenomena (eg, global markets or

value chains) (Dicken et al., 2001; Bathelt and

Taylor, 2002; Mackinnon et al., 2002; Oinas,2002; Ettlinger, 2003; Bathelt et al., 2004;

Dicken, 2004; Hess, 2004; Yeung, 2005a).

Networks, and the associations that bind

them together, are key units of analysis for

research into the sociospatial dynamics of

innovation, regional development, and eco-

nomic globalization. As Bunnell and Coe

(2001) note:

We suggest that networks, with theirassociated attributes of connectivity,

reciprocity, embeddedness and power relationsneed to be brought to center stage. Tracing

networks can assist in identifying the threadsthat both bind and link together particularclusters and nodes of activity, thereby creatingdifferent ‘scales’ or territorializations of activity. (Bunnell and Coe, 2001: 578)

Trust is a key influence on the constitution

and development of economic spaces like

production, innovation, and commodity

networks; one that embeds and stabilizes

relationships, fosters knowledge and tech-

nology diffusion, and helps to create order

in the global economy. As Hess (2004)

observes:

Globalization, then, is obviously not a processof disembedding based on mere markettransactions and impersonal trust, but rather aprocess of transnational (and thereby

translocal) network building or embedding,creating and maintaining personal relations of trust at various, interelated geographicalscales. (Hess, 2004: 76)

While there is widespread recognition of

trust’s importance and role in facilitating

regional development, technology transfer,

and agglomeration economies, it remainsrather undertheorized within economic geog-

raphy and regional science. Specifically, the

literature lacks a clear and consistent concep-

tual framework addressing the processes or

mechanisms through which trust (or distrust)

emerges in a social or economic context.

Whether it facilitates productivity, learning,

and innovation in firms, helps to embed or

ossify particularistic kinds of business net-

works within or between places (eg, family,

clan, or ethnic networks), is stronglyestablished (eg, through friendship or kin rela-

tions), or is weakly ensured (eg, through

goodwill or faith), trust is a fundamental

characteristic of business networks, one

which can significantly influence the transac-

tion costs of exchange, the flexibility, innova-

tiveness, or adaptability of firms, and the

quality of the information or knowledge

flows available to a businessperson. As such,

a detailed understanding of the relational

processes that lead to or prevent trust’s

emergence can tell us much about how

sociospatial structures like networks are actu-

ally performed and sustained by individuals

and firms.

Hudson (2004) recently noted that

an important objective of contemporary

research in economic geography should be

to understand how the flows, circuits, and

428 Building trust in economic space








practices that constitute the global economy

are constructed and situated in distinct times

and places. In applying and extending this idea

this paper argues that the study of trust –

broadly defined as a relational process and

socially constructed phenomenon that, in

part, enables structures such as networks,clusters, or commodity chains to emerge and

be stabilized over time – offers a conceptual

lens through which we can more deeply

examine and understand the dynamics of

industrial change and the sociospatial charac-

teristics, complexities, and contingencies of

economic processes. As Glückler (2005:

1732) observes, trust ‘is a fundamental pre-

condition for many forms of social organiza-

tion’ but one whose qualities and

contributions are inadequately understood.Trust’s specific role in inter-, intra-, and

extrafirm networks is an especially important

consideration but one that has received sur-

prisingly limited attention despite increasing

interest in the relational, discursive, and com-

municative dimensions of economic geogra-

phies (eg, Lee and Wills, 1997; Boggs and

Rantisi, 2003; Amin and Cohendet, 2004;

Yeung, 2005a; 2005b). This paper addresses

this concern by advancing a process-, power-,

and context-sensitive conceptualization of trust, one that can improve theoretical and

methodological links between the micro-

social interactions that constitute economic

relations and the meso-scale and macro-scale

phenomena characterizing the diverse geog-

raphies of the world economy (eg, clusters,

production networks, value chains, and

regional economies). The objective here is

not to assert that trust is essential for all

economic processes but to provide a more

rigorous conceptualization of the sociospatial

mechanisms through which it develops and is

mobilized by economic agents.

The discussion that follows reviews and

assesses the literature on the role and consti-

tution of trust for economic and industrial

development and presents a conceptualiza-

tion of the trust-building process; one that

explicitly accounts for the influences of

agency, institutions, materials, and interper-

sonal expression and which seeks to

contextualize the structural, cognitive, and

intersubjective factors that can lead to or pre-

vent the emergence of trust. In doing so, geo-

graphic concerns about the role of space and

context are linked to economic and sociologi-cal conceptualizations of trust and to scholar-

ship from actor-network theory (ANT) and

social psychology regarding the influence of

power, non-human intermediaries, and social

performance on network configurations.

ANT’s concern with power’s derivation and

practice and its attention to the role of het-

erogeneous materials (ie, human and non-

human agents) in shaping the ordering of

networks, make it significant for the study of

trust as a process influenced in part by powerrelations and the mobilization of intermedi-

aries such as contracts, letters of credit, and

technologies as demonstrations of legitimacy

or trustworthiness. The rich literature from

social psychology, conceptualizing and ana-

lyzing the cognitive, emotive, performative,

and structural dimensions of social encoun-

ters, draws on similar ideas but is particularly

strong in systematically accounting for the

influence of individual meaning systems on

social interactions and in documenting thesubtleties and complexities of face-to-face

communication. In bringing together seminal

ideas from ANT and social psychology, as

well as the extant trust literature, this paper

develops and advances a conceptualization of

trust as a sociospatial process enacted by

agents through relations mediated by struc-

tural factors, power differentials, emotions,

meaning systems, and material intermedi-

aries. The theoretical framework seeks to

shift our understanding of trust beyond static

conceptualizations – trust as instrument,

input, or structural component of networks –

and toward a more dynamic or relational per-

spective on how collaboration occurs and

where and/or why it is situated in particular

places and spaces. In doing so, we can deepen

our understanding of what actually consti-

tutes a network link or a business association

James T. Murphy 429








and, consequently, improve our theorizations

of sociospatial phenomena such as clusters,

value chains, and learning regions.

The remainder of the paper is organized

into five sections. Section II briefly reviews

the economic geography literature on the

sociospatial dimensions of industrial changeand the role of trust for regional development

and innovation. Section III examines concep-

tualizations of trust from economics, eco-

nomic sociology, and organizational theory

and assesses their utility and applicability for

understanding network processes. Section IV

demonstrates how the actor-network theory

(ANT) and social psychology literatures offer

new opportunities for research into the

sociospatial dimensions of trust-building and

networking. Section V presents a conceptualframework that integrates ideas from the

theoretical perspectives reviewed. The paper

concludes in Section VI with a brief discus-

sion on future directions for trust research

and about the broader implications of the

conceptual framework.

II The importance of trust –

perspectives from economic geography

and regional science

Economic geographers and regional scientistshave extensively examined the social and

relational factors that shape industrial

agglomerations and clusters, facilitate (or

impede) urban and regional development,

enable (or disable) information, technology,

and knowledge diffusion and absorption,

incubate (or discourage) entrepreneurship,

and foster uneven development and spatial

concentration in the global economy (Amin

and Thrift, 1993; Grabher, 1993; Ettlinger and

Patton, 1996; Cooke and Morgan, 1998;

Storper and Salais, 1997; Amin, 1999;

Malecki and Oinas, 1999; Maskell and

Malmberg, 1999; Malecki, 2000; Yeung,

2000; Dicken and Malmberg, 2001; Henry

and Pinch, 2001; Bathelt and Taylor, 2002;

Mackinnon et al., 2002; Oinas, 2002;

Murphy, 2002; Scott, 2002; Nijkamp, 2003;

Scott and Storper, 2003; Bathelt et al., 2004;

Hess, 2004). Within these and related stud-

ies, trust is often viewed as an important

contributing factor to local development

(Bellandi, 2001; Henry and Pinch, 2001;

Bathelt and Taylor, 2002), the creation of

clusters, learning regions, and institutionally

‘thick’ places (Grabher, 1993; Amin andThrift, 1993; Cooke and Morgan, 1998;

Nadvi, 1999; Helmsing, 2001), the stabiliza-

tion and legitimization of place identities

(Hudson, 1998), the creativity, solvency, and

innovativeness of firms (Banks et al., 2000;

Murphy, 2002; Nijkamp, 2003; Glückler,

2005), and the historical development of

commercial and business networks (Winder,

2001; Stobart, 2004). Moreover, trust facili-

tates the transfer of codified information,

tacit forms of knowledge, and ‘soft’technolo-gies between places and the trust-building

processes used in and by firms can tell us

much about how workplaces, clusters, value

chains, and production networks are con-

structed (Ettlinger and Patton, 1996; Malecki

and Tootle, 1996; Ettlinger, 2003; Gertler,

2003; Bathelt et al., 2004; Mackinnon et al.,

2004).1

Beyond such instrumental assessments,

geographers are increasingly viewing trust as

a complex social phenomenon or processshaped by knowledge, emotions, reputation,

appearance, gender identities, place-specific

institutions, and power relations (Mackinnon

et al., 2002; Ettlinger, 2003; Gertler, 2003;

Murphy, 2003; Leyshon et al., 2004; Blake

and Hanson, 2005; Glückler, 2005).

Relational proximity is viewed by some as a

key resource for the development of trusting

relationships and is manifest in the degree to

which individuals, firms, and communities

are ‘bound by relations of common interest,

purpose, or passion, and held together by

routines and varying degrees of mutuality’

(Boggs and Rantisi, 2003; Bathelt and

Glückler, 2003; Amin and Cohendet, 2004:

74; Bathelt et al., 2004; Hess, 2004; Yeung,

2005a; 2005b). As such, it does not require

colocation for its benefits to be realized but

instead is a function of the degree to which









individuals or firms are embedded within a

common socio-economic context (eg, in net-

works, a society, or both) and whether there

is an implicit and mutual understanding of the

roles, expectations, and norms for conducting

business together (Hess, 2004). In essence,

an agent’s ability to foster relational proximitywith another can be viewed as an important

first step toward the development of trusting

business ties as it is indicative of one’s knowl-

edge, legitimacy, or credibility in the context

of a business interaction.

Despite this recent turn, toward the

‘softer’ dimensions of networks and business

relations, some are skeptical about trust’s

conceptual and empirical utility and about the

ways in which geographers are applying it to

studies of innovation and regional develop-ment. Morgan (2005) expresses concerns

about what he sees as an ‘exaggerated’

emphasis on relational proximity as a factor

shaping learning and innovation and stresses

the importance of physical distance and

geographical proximity for such processes.

Mohan and Mohan (2002) question the

replicability and cost-effectiveness of studies

aimed at ‘spatially disaggregating’ compo-

nents of social capital such as trust. Instead,

they suggest that scholars focus on moregeneralizable and comparable (temporally and

crossregionally) forms of association (eg, par-

ticipation rates in civic organizations). Gertler

(2003) challenges conventional understand-

ings of the role of trust in tacit-knowledge

transfer and suggests that there is a need to

better understand trust’s specific contribu-

tion to innovation and learning in industries.

More broadly, Oinas (2002) expresses con-

cern about the abstractness of some of the

trust-related network studies and encourages

scholars to pursue more in-depth research

into the specific relationships between the

economic, the ‘non-economic’, and a firm or

region’s innovation and performance levels.

Mackinnon et al. (2002) express similar con-

cerns and stress the need for more compara-

tive, ethnographic, and rigorous investigations

into the precise relationships between

agglomerations, learning, and trust. Such cri-

tiques, perspectives, and concerns demon-

strate why there is a need for some rethinking

about how trust is conceptualized in eco-

nomic geography, both as a social phenome-

non or instrument that emerges from within

particular spaces and as a process facilitating(or obstructing) innovation, entrepreneur-

ship, and regional development.

III Conceptualizing trust –

transaction-cost, sociostructural,

and constructivist views

Rousseau et al. (1998) note that although

there are differences in the ways in which

trust is conceptualized, social scientists gen-

erally agree about its importance and utility in

risky or uncertain contexts.2

From a politicaleconomy and community development per-

spective, trust is a key contributor to civil

society, a factor granting legitimacy to gov-

ernments and political institutions, and an

indicator of social cohesion (Putnam, 1993;

2000; Platteau 1994a; 1994b; Fukuyama

1995; 2001; Knack et al., 1997; Woolcock,

1998; Lyon, 2000; Forrest and Kearns, 2001;

Li, 2004). Within economics, economic soci-

ology, and organizational theory, trust reflects

the alliance strategies used in interfirm andorganizational relations and agents (eg, entre-

preneurs) able to develop trusting relation-

ships can create information and exchange

opportunities unattainable to those more risk-

or trust-averse (Sako, 1992; 1998; Lane and

Bachmann, 1996; Hardin, 2001; Jessop, 2001;

Messick and Kramer, 2001; Yamagishi, 2001).

Beyond its political and economic contribu-

tions, others have documented how trust can

improve the quality and efficacy of environ-

mental and natural resource management

programs (Pretty and Ward, 2001; Adger,

2003; Carpenter et al., 2004).

From a conceptual perspective, much of

the overlap in the literature centers on the

importance of risk and the vulnerability of the

trusting agent since without them trust’s rele-

vance is marginal at best (Gambetta, 1988;

Mayer et al., 1995). Action is anticipated

James T. Murphy 431








when trust is extended and the actions

enabled through trust encapsulate the inter-

ests of both the trusting agent and the trusted

agent (Dasgupta, 1988; Bradbach and Eccles,

1989; Lorenz, 1999; Hardin, 2001; 2002).

There is also recognition of the importance of

distinguishing between trust, a belief in theability of an individual to meet a mutually ben-

eficial expectation, and trustworthiness, a

trust-granting incentive (Mayer et al., 1995;

Hardin, 1996; 2002; Glaeser et al., 2000).

Moreover, numerous scholars have identified

different forms of trust (eg, trust based on

shared experiences or trust driven by institu-

tions) and documented their particular contri-

butions to exchange relationships, economic

development, innovation, and the constitu-

tion of networks (Luhmann, 1979; Zucker,1986; North, 1990; Sako, 1992; 1998;

Williamson, 1993; McAllistar, 1995; Becker,

1996; Cooke and Morgan, 1998; Nooteboom

et al., 1997; Doney et al., 1998; Humphrey and

Schmitz, 1998; Rousseau et al., 1998; Sako

and Helper, 1998; Pixley, 1999; Schmitz, 1999;

Sztompka, 1999; Hardin, 2001; Heimer, 2001;

Murphy, 2002; Ettlinger, 2003; Bathelt et al.,

2004; MacKinnon et al., 2004; Glückler,

2005). Despite the convergences, however,

there are significant differences in the ways inwhich trust is conceptualized and operational-

ized in the literature. The discussion that fol-

lows organizes these conceptualizations into

three broad categories: 1) trust as a rationally

calculated and transaction-cost reducing input

for exchange relationships; 2) trust as a struc-

turally embedded characteristic of inter- and

intra-organizational relations; and 3) trust as

an emergent phenomenon constructed

through social performances. It is important to

note that these categorizations are meant to

be heuristic, not necessarily mutually exclu-

sive, as many believe that trust exhibits a

combination of these characteristics.

1 Trust as a transaction-cost reducing input

for exchange relationships

Proponents of transaction-cost explanations

view trust as a rationally constructed

governance mechanism that enables agents

to conduct repeated transactions more effi-

ciently despite there being incomplete infor-

mation about the true intentions of others.

Three underlying issues create a need or jus-

tification for trust: 1) the bounded rationality

or limited information that constrains thedecision-making capabilities of individuals; 2)

the value of trust as a highly specific asset

that improves the efficiency of particular

transactions; and 3) the potential for oppor-

tunistic behavior by the other agents in a

transaction (Williamson, 1993). In general,

trust is conceptualized at two scales, as a

rationally calculated input at the micro (indi-

vidual) scale or as a macro-scale phenomenon

enabled through the presence of effective

governance structures in an economy or soci-ety. In both cases, the focus is on what

Granovetter (1985) calls ‘functional trust’;

trust that serves a distinct utilitarian role in

governing the relationships between individu-

als and firms.

In the first perspective, trust is viewed as

an individualized and rationally based input,

sunk transaction cost, form of capital, com-

modity, or ‘lubricant’ that facilitates the deci-

sion-making processes of individuals (Arrow,

1974; Dasgupta, 1988; Lorenz, 1988; DeiOttati, 1994; Berger et al., 1995;

Bhattacharya et al., 1998; Dimaggio and

Louch, 1998; Fafchamps, 2001). Actors make

(boundedly) rational choices to trust others

based on a desire to reduce the transaction

costs involved in searching for information,

screening potential business partners, moni-

toring contract compliance, and/or mobilizing

resources (Dasgupta, 1988; Williamson,

1993; Dei Ottati, 1994).3 In essence, trust is a

calculated outcome of relations that emerges

when a threshold is reached beyond which

trust becomes a rational choice (Lorenz,

1988; 1999; Gambetta, 1988; Nooteboom,

1999; Jeffries and Reed, 2000; Bohnet et al.,

2001). Once trust has been invested in it is

rational for actors to continually rely on or

draw from relationships where it is present

(Dei Ottati, 1994; Fafchamps, 2001). This, in









turn, helps to stabilize production systems

and can make it difficult for newcomers, even

if they have price, information, or cost advan-

tages, to intervene or tap into networks and

relationships where trust is well established.4

The second transaction-cost driven

approach focuses on the development of theinstitutions, norms, and property rights that

increase the general level of trust in a society

or economy. Scholars of the ‘new’ institu-

tional economics commonly address this

perspective and view trust as being an

evolutionary outcome or byproduct of history

(North, 1990; Dimaggio and Powell, 1991;

Platteau, 1994a; 1994b; Fukuyama, 1995;

2001). Effective institutions, manifest as gov-

ernance structures that reduce the transac-

tion costs associated with economicrelationships, help create an environment of

trust by protecting property rights and pre-

venting cheating, opportunism, or defection

(North, 1990; 1996; Ensminger, 1997; 2001;

Dasgupta, 1988; Rowthorn, 1999; Peng,

2004). In contrast to the first transaction-

cost perspective, trust is a generalized char-

acteristic of a society or industry and

emphasis is placed on understanding how

political, economic, and social agencies and

actors can foster the development of trust-worthy institutions (eg, property rights, con-

tracts, or legal systems) that encourage

innovation, entrepreneurship, and investment

(North, 1990; Sako, 1992; Landa, 1994;

Misztal, 1996; Knack et al., 1997; Hodgson,

1998; Temple and Johnson, 1998; Ensminger,

2001; Helmsing, 2001).

While the transaction-cost literature

demonstrates how trust can reduce long-run

costs and improve performance, it does not

sufficiently address the contingent, reflexive,

affective, and ideological forces influencing

collaborative activities or the inevitable power

differentials shaping network configurations

and the prospects for trust (Beckert, 2002;

Mollering, 2002; Ettlinger, 2003; Murphy,

2003). Moreover, contextual realities are

often poorly accounted for in these studies,

particularly when scholars apply probabilistic

or game-theory methodologies to explain

how trust decision-making processes occur.

Such approaches, while successful in

accounting for some of the transaction-spe-

cific ingredients that may lead to trust, and in

achieving statistically rigorous analyses relat-

ing trusting outcomes to causal factors, ulti-mately provide relatively little information

about the role of space, place, and context in

shaping trust-building processes and percep-

tions of trustworthiness.

2 Trust as an embedded structural

characteristic of organizations and networks

In contrast to the transaction-cost perspec-

tives, where trust is a rationally calculated

input that facilitates risk taking and collabora-

tion by individuals, organizational theoristsand economic sociologists generally view

trust as a structurally embedded asset or

property of relationships, organizations, and

networks that helps to mobilize resources,

enable cooperation, and shape interaction

patterns within economies, industries, and

firms (Granovetter, 1985; Lane, 1998).5 Trust

is an organizing principle for business net-

works and a key ingredient for long-run eco-

nomic performance (Zucker, 1986; Powell,

1990; Uzzi, 1996; McEvily et al., 2003).6

Embedded or trusting ties offer advantages

over ‘arms-length’ (non-trusting) ties since

they can facilitate the transfer of idiosyn-

cratic, context-specific, or restricted forms of

information and thus increase the adaptability

and flexibility of firms and organizations

(Uzzi, 1997; Darr and Talmud, 2003; Uzzi

and Lancaster, 2003). Trust, beyond enabling

the flow of ‘thicker’ forms of information,

structures and stabilizes networks, con-

tributes significantly to performance and risk

management, and increases knowledge shar-

ing and cooperation (Uzzi, 1997; Bigley and

Pearce, 1998; Dimaggio and Louch, 1998;

Mizruchi and Stearns, 2001; McEvily et al.,

2003). Despite trust’s generally positive con-

tributions to economic development, organi-

zational theorists have also observed how it

may lead to detrimental outcomes if it is

James T. Murphy 433








excessively exclusionary and leads to net-

works that are resistant to change, unable to

absorb new innovations, or concerned with

illicit, illegal, or cartel-like activities (Baker

and Faulkner, 1993; Baker et al., 1998).

The strength of these studies lies in the

empirical links the authors make betweenrelational characteristics and the entrepre-

neurial potential or innovativeness of firms,

organizations, and individuals. While such

contributions are undoubtedly significant, the

focus on patterns and structures, instead of

the processes leading to them, offers limited

insight into how trust actually emerges in

relational settings. Trust-building processes

are often implicitly or explicitly assumed to be

driven by the need to reduce long-run trans-

action-costs (see, for example, Kramer andTyler’s 1996 volume) and beyond such

assumptions there is limited consideration of

the power asymmetries and micro-social

mechanisms that influence trust and which

shape network structures (Emirbayer, 1997;

Emirbayer and Mische, 1998; Bachmann,

2001). Ultimately, network conceptualiza-

tions in their present forms only ‘sparsely’ sit-

uate relations within the context of wider

structural factors (eg, politics and regulatory

environments), individual meaning systems,and the social interactions that perform and

sustain them in real places and spaces in the

global economy (Fligstein, 1996; Knorr-

Cetina and Bruegger, 2002; Sheller, 2004;

Peck, 2005).

3 Affecting trust – constructivist

views on trust

A third area of the literature views trust more

as a social outcome and focuses on how

agents construct trust through communica-

tion and interpersonal negotiation. Although

calculations may play a significant role in such

processes, there is an explicit accounting for

and engagement with the role of cognitive,

emotive, communicative, and contextual fac-

tors in enabling trust to develop (Jones, 1996;

Hardy et al., 1998; Burke and Stets, 1999;

Jarvenpaa and Leidner, 1999; Kavanagh and

Kelly, 2002; Veenstra, 2002; Elsbach, 2004;

McEvily and Zaheer, 2004). Trust is not a

rational choice per se but rather a moral and

subjective construct that emerges when one

agent complies with the expectancies of a

relationship and when one’s self identity (ie,

his or her perceived social role) is recognizedand verified by the other (Garfinkel, 1967;

Goffman, 1969; Hosmer, 1995). As Burke

and Stets (1999) note, trust may be viewed as

the stage of a relationship that emerges

between self-verification and emotional

attachment.

In much of this literature, emotions and

symbolic affectations are seen as key factors

contributing to social cohesion, collaborative

behavior, and the strengthening of pre-exist-

ing forms of trust (Collins, 1981; McAllistar,1995; Messick and Kramer, 2001; Ettlinger,

2003; Cook et al., 2004). Feelings or emo-

tional energies may be associated with

symbolic representations of morality, trust-

worthiness, or honesty and an agent’s ability

to control his or her emotions, in accordance

with the norms associated with a social situa-

tion, increases the probability that trust is

achieved (Hosmer, 1995; Jones, 1996;

Hardin, 2001; Yamagishi, 2001).7 For exam-

ple, empathy is an emotional response thatcontributes to trust building practices

(Messick and Kramer, 2001; Cook et al.,

2004) and an individual’s group membership

(ie, how they communicate a specific social

identity) may foster feelings that facilitate or

prevent the emergence of trusting sentiments

(Williams, 2001).

Constructivist perspectives add a signifi-

cant dimension to our understanding of the

trust-building process by drawing attention to

the realities and subtleties of the social inter-

actions through which trust or trustworthi-

ness may emerge. Unfortunately, however,

most theorizations of trust in the economic

development and social capital literature do

not sufficiently draw from these perspectives

focusing instead on trust as a rationally (and

often acontextually) calculated social out-

come or on how trust, as an input, shapes the









structural configurations of networks and

organizations. Because of this, relatively few

studies address the ways in which trust and

trustworthiness are actually ‘performed’

through affective displays and symbolic forms

of communication in real places or technolog-

ically mediated spaces (eg, the internet,videoconferencing). If we are more thor-

oughly to understand trust’s sociospatial

dimensions, there is a need to contextualize

not only the rationalities, social structures,

and logics that enable agents to act in a trust-

worthy manner (or to grant trust to others)

but also the attitudes, feelings, props, and

visual cues that are mobilized in the process of

constructing trust.

In assessing the trust literature as a whole,

particularly its relevance for economic geog-raphy, two issues stand out. First, while trust

is clearly recognized as an important factor

influencing the structure of networks, the

social characteristics of economies, and the

prospects for innovation in firms and indus-

tries, it remains somewhat static in its con-

ceptualization. Trust is viewed primarily as a

sunk cost, an investment, a relational asset,

or a social construct that strengthens a rela-

tionship or a network’s structure (for better

or worse) in a consistent or predictable man-ner. As such, most conceptualizations of trust

inadequately operationalize the dynamic

social processes that lead to its emergence

and lack sensitivity to the role of place, space,

or context in influencing the behavioral

choices agents make when assessing or

demonstrating trustworthiness. Second,

power is surprisingly absent from most con-

ceptualizations of trust’s development or

application. Trust is typically viewed as a phe-

nomenon distinct from power and one which

represents a neutral or balanced outcome of

social negotiations. In other words, the indi-

viduals involved in trust’s creation have cer-

tain (appropriate) expectations met that are

mutually agreed to and directly proportional

to the level of trust between them. Missing

from such accounts are the inevitable power

differentials that agents mobilize as means for

achieving coordination or control of another’s

behavior. As Allen (1997) observes, the exer-

cise of power is about more than simply con-

straining or dominating others and can be

viewed in terms of the ‘inscribed capacity’ of

individuals or institutions, as a ‘resource for

achieving diverse ends’ (p. 62), or as a mobileor diffuse ‘series of strategies, techniques and

practices’ (p. 63) that can be productive as

well as destructive in their application.

Theorizations of trust need to explicitly

account for the contributions of power if they

are more accurately to depict the sociospatial

mechanisms that lead to collaborative and/or

socially embedded relationships.

To address these concerns, this paper

advances a power-, space-, and process-sen-

sitive conceptualization of trust, one whichviews it as a dynamic, contingent, and situ-

ated social process, not simply as an endpoint

of interpersonal negotiations or an input into

economic relations. The focus here is on the

mechanisms and practices of trust-building

and, indirectly, the means through which

trust institutionalizes or embeds relationships

within and between particular spaces and

places in the global economy. Drawing inspi-

ration from actor-network theory, the social

psychology literature, and recent develop-ments in economic geography on the relation-

ality, embeddedness, and social construction

of economic space (eg, Lee, 2002; Hess,

2004; Hudson, 2004; and Yeung, 2005a;

2005b), trust is conceptualized as a social

process shaped by actors’ performances,

human and non-human intermediaries, and

the power differentials between interacting

agents; one which is situated in relation to

specific geographical contexts and economic

logics for exchange and interaction. By doing

so, the conceptual framework demonstrates

why it is imperative spatially and tempo-

rally to situate micro-social practices like

trust building if we are to better understand

how phenomena such as clusters, interfirm

networks, value chains, and regional

economies are created, transformed, and

sustained.

James T. Murphy 435








IV New directions in trust research –

actor-network theory and social

psychology

In linking the literature to concerns about

how trust-building processes influence the

spatial dimensions of networks and regional

economies, two conceptual perspectives areparticularly useful – actor-network theory

(ANT) and scholarship from social psychol-

ogy, ethnomethodology, and symbolic inter-

actionism.8 ANT is significant because of its

focus on the role of technologies, materials,

and power differentials as factors shaping the

constitution of network spaces; spaces char-

acterized, in part, by varying degrees of trust

and distrust. The social psychology literature

is helpful because of its concern with the real-

world performances and interactions thatlead to outcomes such as trust or trustwor-

thiness. The ANT and social psychology liter-

atures are briefly reviewed below with an

emphasis on linking key theories or perspec-

tives from these fields to conceptual ideas

about how trust is constituted and enacted in

space.

1 Actor-networks and the

trust-building process

Actor-network theory is fundamentally con-cerned with the power relationships and asso-

ciations that lead to stabilized social and

economic practices, networks, scientific

knowledge, innovations, and/or institutional

structures. A key idea is that economies, mar-

kets, laboratories, communities, etc are, in

actuality, constituted by particular combina-

tions of human agents, non-human interme-

diaries, and power expressions that enable

actors to set agendas, define roles and identi-

ties, build alliances, and mobilize resources

(Callon, 1986; 1999; Latour, 1986; 1993; Law,

1986; 1992; 1994; 1999). Actors are them-

selves networks, constituted not only by their

cognitions and senses of self-identity but also

by the ‘set of elements (including, of course, a

body) that stretches out into the network of

materials, somatic and otherwise, that

surrounds each body’ (Law, 1992: 384).

Actor-networks are thus relational entities

shaped by power asymmetries and consti-

tuted by the chains of interactions or links

between/among heterogeneous materials (ie,

both human subjects and non-human

objects). Agency is an important concern

here, particularly in its relationship to actors’definitions of themselves and in how agents

interpret and utilize knowledge and artifacts

in relational settings (Murdoch, 1995; Smith-

Doerr and Powell, 2005). An agent success-

fully translates his or her power into desired

actions and outcomes through the building up

of alliances and by enrolling or ordering het-

erogeneous materials in his or her network.

As Murdoch (1995) observes:

In order for an actor successfully to enroll

entities (human and non-human) within anetwork, their behavior must be stabilized andchanneled in the direction desired by theenrolling actor. This will entail redefining the

roles of the actors and entities as they comeinto alignment, such that they come to gainnew identities or attributes within thenetwork. It is the intermediaries . . . which actto bind actors together, ‘cementing’ the links.

(Murdoch, 1995: 747)

Beyond addressing issues of agency and

power, proponents of ANT view it as a valu-

able tool for unpacking and understanding thematerial ‘wheres’ of interactions, the means

through which agents ‘act at a distance’ (ie,

extra-locally) on one another, and the social

and cognitive spaces where performances

occur and relationships are embedded and

‘ordered’ (Law, 1986; Latour, 1987; Mol and

Law, 1994; Murdoch, 1995; 1997; 1998;

Sheppard, 2002; Hess, 2004).

When viewed in relation to ANT, trust

and trust-building processes are important

resources or means for enrolling human

agents in networks and thus for stabilizing

associations of heterogeneous materials.

While certainly related to and influenced by

power relations, trust may serve as a tool for

translation or a means for ‘cementing’ the

links that bind agents together in networks.

ANT can thus contribute to our under-

standing of trust by providing a theoretical









framework through which the materials,

intermediaries, and agents that engender

trust may be situated within the times, con-

texts, and spaces where interactions occur. In

doing so, it may be possible to identify and

catalog some of the place-specific practices

and elements that enable (or prevent) trust to(from) emerge (emerging) in a network. In

essence, trust can be viewed as a means

through which actor-networks are extended

across time and space consequently enabling

economic agents (eg, firms or entrepreneurs)

to develop and stabilize relationships for

learning, innovation, and productivity. As

Harrisson et al. (2001) note:

[ANT] helps to identify actors involved in aninnovation and how they succeed in extending

the network, who participates and why, who’sopposed and why, and what should be done towin the support of resistant actors. (Harrisson et al., 2001: 219)

In a sense, resistance or support may be a

function of the degree to which an actor cre-

ates a sentiment of trustworthiness in the

minds of others.

For example, in Murdoch’s (1998) analysis

of ANT’s spatial applications, he distinguishes

between spaces of prescription – where

appropriate actions, materials, and behaviorare relatively durable and fixed – and spaces

of negotiation – where the network is more

fluid, contested, and continually being

adjusted. In the first case, trustworthiness

may be associated with one’s adherence to a

well-defined and established set of norms,

conventions, and routines associated with

institutional forms of trust (eg, the activities

of currency traders; see Knorr-Cetina and

Bruegger, 2002). Moreover, because of this

fixity, durability, and standardization, actors

participating in such networks may find it pos-

sible to ‘act at a distance’more effectively. In

the second case, where the network is rela-

tively unstable and where identities, roles,

and attributes are still being negotiated and

contested, one can imagine that proximate

variables such as ascriptions, emotions, and

observed competence might play a more sig-

nificant role in determining who is and is not

trustworthy. In both cases, there are context

and goal-specific symbols, signals, materials,

technologies, and actions that can act as

intermediaries in or be relevant for trust-mak-

ing decisions. By focusing on the role of

agency in relation to a specific logic or ration-ale for action, and in a particular place and

time, ANT can effectively bring together the

combinations of elements that enable eco-

nomic and social actions to take place (Bruun

and Langlais, 2003).

2 The social psychology of trust building

ANT’s concern with empirical realism, power

relations, and the heterogeneity of networks

brings it into close contact with social psy-

chology, ethnomethodology, and symbolicinteractionism (Law, 1994; 1999). Scholars in

these fields have long recognized the impor-

tance of performance, social setting, reflexiv-

ity, and symbolic communication for

self-perceptions, individual and group identi-

ties, social exchange and practice, and the

construction of social and economic systems

(Cooley, 1902; Mead, 1934; Goffman, 1959;

1961; 1974; Schutz, 1964; 1967; Garfinkel,

1967; Blumer, 1969; Collins, 1981; Fine, 1992;

1993; Hermans et al., 1992; Richardson et al.,1998; Gergen, 1999; Hermans, 1999; 2001;

Lawler, 2001; Callero, 2003). Increasingly,

economic sociologists and organizational

theorists are applying ideas from this litera-

ture to studies of the micro-social mechanisms

shaping exchange relations, organizations,

markets, and commodity chains (Knorr-

Cetina and Bruegger, 2002; McEvily et al.,

2003; Rodan and Galunic, 2004). As interest

in the sociospatial dynamics of networks

increases, geographers too have begun to

engage with social psychology in quests for a

deeper understanding of the links between

context, performance, communicative prac-

tice, knowledge transfer, and the formation of

business alliances (Oinas, 1999; Thrift, 2000;

Bathelt and Glückler, 2003; Tracey and Clark,

2003; Bathelt et al., 2004; Storper and

Venables, 2004).

James T. Murphy 437








Four ideas from social psychology are

especially relevant for the conceptualization

of trust-building processes. First, social inter-

actions are shaped by the frames, interpreta-

tive frameworks, or situational definitions

that agents mobilize or reference during a

particular encounter (Mead, 1934; Goffman,1959; 1974; Garfinkel, 1967; Blumer, 1969).

Such frames are a function of the logic behind

a social interaction and act, in essence, as

normative and ontological reference systems

that guide an individual’s behavior. Situational

definitions, when implicitly agreed upon by

agents, can lead to mutual understanding and

possibly the emergence of trust. However,

such understandings may have the opposite

effect when an agent recognizes a circum-

stance where opportunism on the part of another agent is likely or probable (eg, a con

game or swindle).

Second, social psychologists stress the

importance of accounting for reflexivity and

power asymmetries in social interactions and

are concerned with understanding the ways

in which individuals ‘objectify’ themselves as

social selves through role playing in relation to

a particular frame or situational definition

(Cooley, 1902; Thomas, 1923; Mead, 1934).

As Callero (2003: 127) notes, the self is ‘afundamentally social phenomenon, where

concepts, images, and understandings are

deeply determined by relations of power.’ In

essence, the social ‘who’ we are is in large

part a function of how much power we have

in the context of a particular situational frame

or definition. For example, individuals who

recognize that they have a superior power

position in an interaction (eg, a job candidate

screener) may be less concerned about

appearing good-natured or friendly while

those in inferior power positions (eg, a job

candidate) may make a more concerted effort

to be liked and to display positive emotional

expressions. Individuals consistently reflect

upon where they stand in an interaction and

make adjustments accordingly in order to

improve the prospects for achieving trust or

for understanding the degree to which

another may be trusted. Trust can emerge

when the trusted agent effectively realizes or

takes on the role of the social or professional

self viewed by the trusting agent as appropri-

ate for a particular interaction (Mead, 1934;

Blumer, 1969; Burke and Stets, 1999).

Third, in exploring the communicativeprocesses that shape social systems, social

psychologists often apply the notion of inter-

subjectivity, what Schutz (1967) and Knorr-

Cetina and Bruegger (2002) refer to as the

‘coordination of consciousness’between two

(or more) agents, to explain how speech acts,

social interactions, and performances lead to

mutual understanding. Habermas (1984) and

Zierhofer (2002) view intersubjectivity as a

critical mechanism for achieving communica-

tive rationality and/or the coordination of social action. Such an understanding occurs

when individuals’ interpretations of physical

reality, social norms and expectations, and

their personal thoughts, feelings, or perspec-

tives align in the process of proximate or non-

proximate (eg, telephone conversations)

communication (Schutz, 1967; Knorr-Cetina

and Bruegger, 2002; Ziehofer, 2002). As

Habermas (1984) observes:

what is paradigmatic for [communicative

rationality] is not the relation of a solitarysubject to something in the objective world,but the intersubjective relation that speakingand acting subjects take up when they come toan understanding with one another aboutsomething. In doing so, communicativeactors move in the medium of a natural

language, draw upon culturally transmittedinterpretations, and relate simultaneously tosomething in the one objective world,something in their common social world, andsomething in each’s own subjective world.

(Habermas, 1984: 392)

In applying the concept more directly to trust,

it is clear that interpretations of an individual’s

trustworthiness will be shaped, in part, by the

degree to which intersubjectivity is achieved

in the communicative process.

Fourth, social psychologists recognize the

importance of personal appearance and per-

formative space in determining what roles









and actions are appropriate, acceptable, and

useful for achieving a specific objective or

outcome. Goffman (1959) views the personal

front and the setting as key elements of any

social performance and distinguishes between

front regions – where impression manage-

ment is crucial – and back regions – whereless formalized and structured encounters

take place. As Law (1994) observes in relation

to the activities of scientists at the Daresbury

laboratory:

Frontstage, there are bright-eyed, bushy-tailed

performances. And backstage there is all theeffort that goes into mounting thoseperformances. But the dualism is not onlyepistemological, but also moral. For what goeson frontstage is also a form of impression-

management, and it slides easily into

dissimulation [feigning], or suspicion of dissimulation. So it is that in enterprise thesyntax of performance gets divided from thesyntax of reality, and the need to perform

starts to erode the possibility of trust. (Law,1994: 176)

While performances ‘frontstage’ must convey

legitimacy, competency, trustworthiness,

and/or appropriateness, there is the danger

that such performances may be perceived

as acted or less meaningful expressions.

The point is that, while performances areundoubtedly important, trust does not

emerge through them alone as it is also

shaped by institutional structures and the cal-

culations, dispositions, and prior experiences

of individuals.

In sum, social psychology offers insights

into the ways in which actors define situa-

tions, conduct social performances, consti-

tute themselves and each other, and relate

observations of another’s behavior to their

subjective understandings of the world. In

relating these ideas to trust, space, and eco-

nomic development, there are two key

considerations that theories should address.

1) Where is the ‘frontstage’ and what are the

‘frontstage’ performances (ie, the impression

management strategies) that lead to trust in a

particular business situation? 2) How are inter-

pretations of ‘appropriate’ (ie, trust-inducing)

social selves influenced by where someone is

from and with who and where they normally

conduct business? In addressing these ques-

tions there is an implicit recognition of and

accounting for the socio-economic contexts

and performance spaces where trust is

constructed as such settings significantlyinfluence the situational frameworks, speech

acts, or behavioral assumptions deemed

appropriate.

Taken together, the ANT and social

psychology literatures offer theoretical and

methodological guidance for ways in which

we can more rigorously consider what

Hudson (2004: 457) terms the ‘processes and

interplay between the realms of the material,

the symbolic, and the social through which

the meanings of commodities are created,fixed, and reworked’. In this case, the ‘com-

modity’ might be viewed as trust but the

conceptual emphasis transcends the view

that trust is merely a resource or input for

socioeconomic relations. Instead, the focus is

on how social actors generate meanings

about what trust entails and how a stabilized

or fixed (at least temporarily) understanding

of its implications might lead to distinct eco-

nomic practices and outcomes. By applying

ANT and social psychology to examine thesocial processes that lead to the development

of trust, economic activities can be situated

within the discursive spaces where they

occur, not simply in terms of rational choices

and transaction-cost calculations. In doing so,

there is an explicit recognition of the ways in

which power is practiced, intermediaries are

mobilized, and social performances take place

through communicative processes and inter-

personal negotiations.

As Lee (1989; 1997; 2002), Hudson

(2004), and Yeung (2005a; 2005b) have

observed, the performance of economies and

firms is determined in large part by such rela-

tions and discursive practices as they enable

communication, offer direction, facilitate

evaluation, and, most significantly, lead to

shared understandings about who does what,

why, when, and where. Moreover, these

James T. Murphy 439








social processes and negotiations shape the

spatial structures of firms and industries and

influence the prospects for innovation and

growth in regional economies. Beyond helping

to unravel some of the complexities, prac-

tices, and contingencies of inter-, intra-, and

extra-firm relationships, ANT and social psy-chology compel us to have a deeper under-

standing of, or appreciation for, the actual

contexts, spaces, and locations where net-

working occurs, trust emerges, and collabora-

tive institutions become embedded. The

remainder of the paper applies these litera-

tures, as well as key ideas from the extant

trust literature, to the development of a

heuristic conceptual framework for trust; one

that unpacks and details the cognitive, inter-

subjective, and structural factors influencingthe sociospatial process of trust building.

V Reconceptualizing trust-building

processes

The conceptual framework that follows

applies seminal ideas from the literatures

reviewed above to depict the sociospatial

process through which trusting relationships

emerge; one which will facilitate the ‘unpack-

ing’ of the dispositions, meanings, symbols,

norms, materials, spaces, and power relationsthat influence the decision-making processes

of individuals within particular relational

settings. Trusting relationships and network

connections are theorized here as ‘temporal-

relational’ fields which emerge from within

particular social, material, and political set-

tings and which are maintained and trans-

formed through the cognitions, symbolic

exchanges, and performances of the agents in

them (Collins, 1981; Emirbayer and Mische,

1998). These relational spaces may be

ephemeral, mobile, and highly fluid in nature

or they may be fixed, stabilized and embed-

ded in particular territories, networks, loca-

tions, or spaces through markets, cultural

systems, norms of participation, location-

driven contingencies, or established ties

between individuals (Mol and Law, 1994;

Hess, 2004; Sheller, 2004).9

Trust not only influences the quality or

strength of particular associations in a net-

work but also the network’s spatial extensive-

ness and openness to new participants and

ideas. Trust-building processes are commu-

nicatively driven and shaped by influences at

three scales – the micro (the subjective), themeso (intersubjective), and the macro (the

structural or institutional). These scales or

levels correspond to Emirbayer’s (1997)

model of the key dimensions of relational

thinking – individual-level identities, under-

standings, and embodiments (the micro

scale), face-to-face or person-to-person

encounters (the meso scale), and the norms,

values, identities, and institutions that are

embedded in a social system (the macro

scale). Moreover, these levels may be linkedto Humphrey and Schmitz’s (1998) typology

of micro-scale, meso-scale, and macro-scale

forms of trust. At the micro scale, trust is

constructed over time and through subjective

interpretations of shared experiences and the

competence of another agent. At the meso

scale, feelings of trust emerge through face-

to-face or person-to-person encounters and

on the basis of ascriptions, group member-

ships, or other characteristics the trusting

(distrusting) agent ascribes to or associateswith trustworthy (untrustworthy) individuals

(eg, race, religion, or appearance). Macro-

level trust is more generalized, derived from

institutionalized attitudes about the trustwor-

thiness of people, from religious or philosoph-

ical values, or from beliefs in the ability of

government or other institutions to protect

one’s rights should his or her trust be violated.

Ultimately, the decision to trust must

occur at the micro scale where agents evalu-

ate and consider the risks, benefits, perform-

ances, and institutions influencing a particular

exchange relationship or social interaction.

Trust emerges when there is congruence

between the trusting agent’s expectations

about appropriate roles in a given situation

and the actions performed by the trusted agent

(Goffman, 1961; Sztompka, 1999; Knorr-

Cetina and Bruegger, 2002; McEvily et al.,









2003). Appropriateness is a function of fac-

tors at the micro (subjective or cognitive),

meso (intersubjective), and macro scale

(structural or institutional) and depends on

the trusting agent’s ‘definition of the situa-

tion’, a definition shaped by the logic or

rationale for the interaction. In the businessworld, such logics or rationales may relate to

material goods (eg, the need to access

resources through relations with a supplier),

technology or knowledge transfer processes,

or symbolic issues (eg, the desire to build a

reputation through relations with a cus-

tomer). When an agent pursues a particular

logic through an interaction, he or she acti-

vates an ‘interpretative framework’ that

influences how risks and rewards are calcu-

lated (the micro scale), how performances orencounters are evaluated (the meso scale),

and which norms, rules, laws, or conventions

(the macro scale) are referenced (Garfinkel,

1967; Goffman, 1969; Knorr-Cetina and

Bruegger, 2002).

Figure 1 summarizes how an interpretative

framework is constituted in relation to the

three scales. At the micro or subjective scale,

trust-building practices are influenced by an

individual’s disposition or general willingness

to trust, her perceived power or control of thesituation, her calculation of the risks and

uncertainties related to the extension of

trust, and her assessment of the rewards

associated with, or interests encapsulated

through, the actions derived from the estab-

lishment of trust. The meso or intersubjective

scale is constituted by the ‘personal front’and

the ‘setting’ (Goffman, 1959). The personal

front is constructed through the performanceor embodiment of speech acts, expressions,

gestures, emotional energies, and social cues

or significant symbols (Mead, 1934; Goffman,

1959; Blumer, 1969; Collins, 1981; Burke and

Stets, 1999; Lawler and Thye, 1999; Lawler,

2001). The setting relates to the physical loca-

tions and spaces within which or across which

the interaction occurs (eg, face-to-face, face-

to-screen) and the props, appearances, mate-

rials, and technologies that can mediate these

exchanges (Goffman, 1959; Knorr-Cetina andBruegger, 2002). At the macro scale, the role

of wider institutions, structural conditions,

circumstances, and hierarchies are accounted

for and these include the laws, norms, and

rules for conducting business, the value sys-

tems embodied in religious beliefs or political

ideologies, and the sanctioning institutions

(eg, the legal system) that can help an agent

respond to opportunistic behavior. Beyond

such institutions and structures, there is a

need to consider the positionality of the firmor individual within a wider society or the

global economy (Sheppard, 2002). Position

James T. Murphy 441

Figure 1 Conceptualizing the trust-building process








might be related to or derived from social

class, market power, the location of the busi-

ness, or the firm’s position in a global value

chain. Finally, it is also imperative to account

for the influence of economic or industry-

specific circumstances and present-day struc-

tural or institutional realities (eg, conditionscreated by a dramatic economic reform

process or a political crisis) as influences on

trust’s potential development. Jones (1996),

using an extreme example, cites China’s

Cultural Revolution as a period or ‘climate’

when generalized distrust was the norm and

there were generally few incentives for trust-

ing others. Other, perhaps less extreme,

climate-influencing factors might relate to

place or region-specific changes in regulations

and laws, the general performance of marketsand industries, geopolitical issues, ethnically

driven or class-based conflicts, or natural and

human-created disasters.

In applying this conceptual framework to

empirical research it will be imperative to

obtain detailed descriptions from individuals

about how they develop and define trust in

relation to particular economic logics (eg, a

supplier relationship, customer relationship,

or a business alliance). In doing so, the role

and significance of micro-scale, meso-scale,and macro-scale factors can be elucidated in

terms of how they influence trust’s emer-

gence in a particular business relationship,

economic situation, and geographic context.

It is crucial to note, however, that while

recognizing and acknowledging the diverse

contributions of these factors remain impor-

tant, what is essential is the specific manner in

which they are collectively realized in a rela-

tionship or social encounter. As Mansfield

(2005: 472) recently asserted, scales are best

viewed as ‘dimensions’ of particular events

and processes ‘always produced in complex

interrelation with, and as aspects of, other

scales’. In linking this notion to the conceptual

framework presented here, micro-, meso-,

and macro-scale characteristics of trust-

building processes are not interlinked in a lin-

ear, hierarchical, or accumulative fashion, but

instead emerge in relation to one another and

to the sociospatial contexts where individuals

interact. Ultimately, the conceptualization’s

purpose is not to reduce or disassemble trust

into set of constitutive parts or components

but instead to demonstrate heuristically how

trust-building processes are complex, com-municatively driven, geographically contin-

gent, and inseparable from exercises or

structures of power and control.

VI Concluding remarks

Beyond applications of the conceptual frame-

work to examinations of how trust con-

tributes to innovation and knowledge creation

in clusters, learning regions, production net-

works, value chains, and urban economies,

three directions for future research are espe-cially intriguing. First, there is a need to under-

stand better the processes through which

crosscultural and crosscontextual business

alliances and relationships develop in the global

economy. Such research will be especially

important in determining how firms in devel-

oping and emerging economies can create

more durable and trusting transnational rela-

tionships to facilitate innovation and growth

(see, for example, Saxenian and Hsu, 2001).

Second, there is a need for more research intothe dynamics of collaboration and trust-build-

ing within non-embodied relational spaces,

particularly those enabled through information

and communication technologies (eg, the

internet). Knorr-Cetina and Bruegger’s (2002)

fascinating study is a prime example of

research in this regard as it illustrates how cur-

rency markets are in reality constructed

through global chains of interactions playing

out through responsive or face-to-screen

encounters between individuals situated in

offices all over the world. Third, the frame-

work can be applied to studies that focus on

the power asymmetries that shape collabora-

tive relationships in order to determine how

power is constituted within and influenced by

the social spaces where individuals interact

and the wider geographical contexts where

firms and industries are situated.









In closing, it is important to stress that the

conceptualization presented here is intended

to be more than simply a collection of vari-

ables or influences on the trust-building

process. While accounting for the role of such

factors surely is important, the framework

also offers a means for considering and under-standing the ways in which collaborative

practices, trusting relationships, and network

associations are situated within distinct times,

places, and interactive spaces through partic-

ular combinations of materials, symbols,

social practices, and institutions. By situating

trust and collaboration in this manner, it may

be possible to shift away from static concep-

tualizations of sociospatial economic phe-

nomena (eg, agglomeration economies) to

more place-, space-, and process-sensitiveunderstandings of how value chains, clusters,

knowledge flows, and transnational alliances

are actually constituted. Issues of agency and

power shift to center stage and scale, while

relevant in a conceptual sense, is collapsed

into the context of a single association or net-

work relationship. Thus the conceptualiza-

tion’s broader significance lies not in

describing how factors at different scales

influence trust but rather in its unpacking of

trust in relation to the actual agents, spaces,and places where it emerges and in its contex-

tualization of the micro-social processes that

drive the relationships and networks that ulti-

mately constitute firms, industries, markets,

and economic regions. In doing so it can facil-

itate, through empirical research, a move

beyond solely instrumental conceptualiza-

tions of trust (ie, trust as lubricant, relational

asset, input, or sunk cost) and toward a

relational understanding of how the means for

establishing and sustaining collaborative

relationships influences the development

and potential of such ‘ends’ as clusters and

production networks.

Acknowledgements

The author would like to sincerely thank

Roger Lee and three anonymous reviewers

for their thoughtful and highly constructive

comments on earlier drafts of the manuscript.

The usual disclaimers apply.

Notes1. Two recent examples demonstrate these

sorts of contributions. First, Ettlinger (2003)

shows why it is important to account fortrust’s different forms or sources (eg, trust

based on capacity or trust based on feelings)

in order to understand better how and why

discriminatory (or more equitable) manage-

ment practices emerge within particular

workplaces. Second, Mackinnon et al. (2004)

in their study of the Aberdeen oil industry,

find that local reputation and credibility, what

they consider lower-level forms of trust, play a

greater role in the development of extra-local

business relationships than they do in the

establishment of local information and knowl-

edge transfer networks.

2. As Rousseau et al. (1998) note, economists

generally view trust as a rationally calculated

risk, psychologists as an internal cognition,

and sociologists as a socially embedded prop-

erty of relationships.

3. Williamson (1993) argues that rationally

calculated trust is really a form of risk taking,

not trust as he understands it. For him, real

trust can only be personal and emotional

(eg, the trust we have in people we love) or

‘hyphenated’ (eg, the trust we have in politi-

cal, cultural, social, or economic institutions).4. Methodologically, studies of trust from this lit-

erature often involve surveys and statistical

analyses of the key factors driving trust deci-

sions (eg, reputation, experience, etc), game

theory studies using prisoner dilemma-type

methods to assess trust-making probabilities,

or experimental trust games with real people

(Butler, 1991; Nooteboom et al., 1997;

Bhattacharya et al., 1998; Glaeser et al., 2000;

Bacharach and Gambetta, 2001; Buchan

et al., 2002; Barr, 2003; Carpenter et al.,

2004).5. For a more thorough assessment of per-

spectives on trust from economic sociology

and organizational theory, see Kramer

and Tyler’s (1996), Lane and Bachmann’s

(1998), and Kramer and Cook’s (2004) edited

volumes.

6. Beyond assessing trust’s structural contribu-

tions to organizations, networks, and market

James T. Murphy 443








institutions, organizational theorists and eco-

nomic sociologists have also explored the

complementary relationships between trust

and distrust, the fuzzy boundaries between

trust, control, and power, the communicative

dimensions of trust-building processes, trust’s

importance for leadership, and the role of

institutions, histories, and cultures as influ-

ences on trust’s constitution (Lane and

Bachmann, 1996; Das and Teng, 1998; Doney

et al., 1998; Lewicki et al., 1998; Bachmann,

2001; Reed, 2001; Kramer and Cook, 2004).

7. An alternative perspective on the role of emo-

tions views them as rationally constructed

instruments, objects, expressions, gestures,

or symbols that influence the dynamics of

social interactions and foster the emergence

of specific social patterns in a society

(Kemper, 1978; Heise, 1979; 2005; Frank,

1988; Lawler et al., 2000).8. Throughout most of the remainder of the

paper the social psychology, ethnomethodol-

ogy, and symbolic interactionism literatures are

referred to collectively as social psychology.

9. A highly fluid space might entail the

interactions between people in a subway car or

through a mobile communication device while

a more fixed and stabilized space would be a

boardroom or the shop floor of a manufactur-

ing plant. See Sheller (2004) for a helpful

discussion on the increasing importance of

technologically mediated and highly fluid inter-active spaces in contemporary cities.

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