The name is absent

International Food and Agribusiness Management Review, 2(2): 179-193 Copyright © 1999 by Elsevier Science Inc.

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Trustworthiness as an
Economic Asset<

Abstract: The evaluation of trust in economic decision making
remains on the periphery of mainstream economic analysis and teach-
ing. Yet business managers use trustworthiness in daily exchanges to
create competitive advantages for their firms. An exploratory empirical
test of Barney and Hansen’s three levels of trust (weak, semistrong, and
strong) and Lewicki and Bunker’s portfolio of governance mechanisms
revealed that strong-form trust exists in day-to-day business relation-
ships along with other governance mechanisms. Identity-based trans-
actions were more prevalent than were weak trust market exchanges in
important economic transactions.

Trust is an important lubricant of a social system. It is extremely efficient; it saves a
lot of trouble to have a fair degree of reliance on other people’s word (Arrow, 1974, p. 23).

Trust is at the root of any economic system based on mutually beneficial exchange.

If a significant number of businesspeople violated the trust upon which our interactions
are based, our court system and our economy would be swamped into immobility
(Greenspan, 1999).

Introduction

In the last decade, after nearly 30 years of neglect, there has been renewed interest
in trust as an important economic determinant of business success (Macaulay,
1963). A trustworthy identity, it is argued, is not only valuable information in an

< This research was supported in part by grants from the USDA’s National Research Initiative Grant Program
“Markets and Trade” and the Jimmye S. and Helen F. Hillman Endowment for the Exchange of Scholars.

Direct all correspondence to: Paul N. Wilson, Department of Agricultural and Resource Economics, The
University of Arizona, Tucson, Arizona 85721-0023

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