Generalised trust, external sourcing and firm performance
Bart Vanneste, UCL
Bart Vanneste, UCL
The relational view advocates relationships between firms as an important unit of analysis. In line with this view, this study investigates how generalized trust at the regional level induces a firm to have more or fewer relationships with other firms as well as the performance effects of making such choices. In particular, we consider how trust affects the extent to which a firm sources inputs externally versus internally. We use data on more than a million small- and medium-sized enterprises (SMEs) from 145 regions (in 12 European countries) that differ in their level of generalized trust. We select control variables via a double-selection procedure based on machine learning. Consistent with our arguments, we find that the extent of external sourcing by SMEs is (a) greater in regions with higher levels of generalized trust and (b) more positively correlated with firm performance in such regions. Whereas previous research on relationships between firms has focused on dyadic, party-specific trust, this study demonstrates the importance of generalized trust originating from a broader context.
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Bart Vanneste is an Associate Professor (Reader) in the Strategy & Entrepreneurship group of the UCL School of Management. Bart’s research focuses on corporate strategy and relationships between organizations. He has published widely including a book titled Corporate Strategy: Tools for Analysis and Decision-Making and in prestigious journals such as Academy of Management Review, Organization Science, Strategic Management Journal, and Strategy Science. Bart is also active in management education and was awarded the Management Best Teacher Award by UCL School of Management. He obtained a Ph.D. in Strategic & International Management from the London Business School and an M.Sc. in Data Science & Machine Learning from UCL, and was on the faculty of INSEAD.
Food Provided ( Food Provided (((Refreshments will be provided from 12pm-12:30pm prior to the workshop in the 4th floor faculty lounge area. )) ))
Cass Business School, 106 Bunhill Row
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