Do Industrial Clusters Still Matter to Trust-Building in the Internet Era? A Network Embeddedness Perspective

Abstract

Despite the considerable amount of research regarding trust as one of the most important characters and competitive advantages for an industrial cluster, few empirical studies have examined whether geographic proximity still leads to higher levels of trust in the current Internet era. This article explores this issue of trust from a network embeddedness perspective. Based on the data from Zhongshan gas appliance cluster, we employ structural equation modeling to examine the extent to which relational embeddedness, structural embeddedness, and positional embeddedness have any impact on trust-building in the cluster. Our findings reveal that high clique trust and low aggregate trust coexist in the cluster, showing that the effect of geographical proximity on trust has been weakened and is no longer a sufficient condition for trust-building. This study also gives some suggestions on how to improve the trust within a cluster through network governance.