Determinants of Trust in Supplier Relations: Evidence from the Automotive Industry in Japan and the United States

Abstract

This study examines the determinants of inter-organizational trust by using survey data from just over 1000 suppliers in the automotive industry. We define trust and derive a model of its determinants from transaction cost economics, game theory and sociological exchange theory. Regression analysis results indicate that determinants of trust are different from determinants of opportunism. US-Japanese differences are found in three respects: (i) the way trust is conceptualised by suppliers is richer in Japan than in the US; (ii) the level of trust is higher in Japan than in the US; and (iii) the factors facilitating trust and those attenuating opportunism differ in the US and Japan.