Level of trust and confidence of companies in contractors and business partners vs. the level of innovation

Abstract

Modern development economy and regional policy more and more often refer to the significance of institutional factors. Not only geographical vicinity may be a variable which affects the speed of growth, but also social vicinity starts to play an increasingly important role. The concept of social vicinity is based on the thesis of Granovetter about the embedding of all economic relations in certain social contexts (spatially varying social contexts). Social vicinity reflects the embeddedness of companies and their employees in informal relationships and social networks, which are based on trust between people. This encourages the spread of knowledge and efficient learning by providing more communicative context than that associated with impersonal transactions, eliminating frictions and difficulties related to pure trade, allowing for the achievement of goals which would not have been realised without the existence of social relations and trust.

Keywords

• trust
• innovativeness
• regional policy