Empirical Study On The Impact Factors Of Trust Among Enterprises In Industrial Cluster: Based On The Perspective Of Network Embeddedness

Trust is an essential factor for the growth and sustainable development of any enterprises. Despite this fact the trust can be a source of conflict and hinder social, economic and environmental development in not managed properly. Since transparent sharing of economic development information, it is essential to provide measures that will facilitate a good relationship between cooperating actors. The availability of a conductive environment enables fertile grounds for trust breeding and better cooperation among actors. A successful cooperation among actor results in the provision of value added goods and services that satisfy the needs of its potential clients. In doing so firms turn to gain the trust of consumers and this enables firms to build a reputable brand whereas deepen its market shares. Evidently a successful cooperation among actor results in the formation of a virtuous circle between cooperating enterprises and customers.Based on the significance of trust in the development of any social organization or entity, this study examines the determinants that facilitate trust among enterprises in an industrial cluster. The study examined this enables from the network perspective where the relational, structural and positional embeddedness is examined respectively. Firstly the study reviews the relevant literature and trust to bridge the gap within the current state of research in relation to trust and inter-cluster cooperation. Based on the gap identified, the network embeddedness approach is adopted to aid in the construction of a conceptual model to test how actors’ embeddedness to a particular network influences trust.In order to examine the factors, the Zhongshan Gas Appliance Cluster is chosen as the sample for this study. Questionnaires were used to collect that from key informants within this industry cluster to enable the research assess the current status of trust among firms and also which factors happen to have a significant influence on trust building. Due to the empirical nature of this study, the SPSS version 20.0 statistical software is used to perform a reliability and validity test, factor analysis and correlation analysis. In addition to the AMOS version 20.0 is used to perform confirmatory factor analysis and path estimation to investigate how each variable influences the performance of the overall model understudy.The result indicates that various aspects of the network embeddedness such as relational, positional and structural embeddedness had distinct impact on trust of cooperating actors. From the empirical analysis it suggests that factor such as effective communication between the upstream and downstream firms is essential. Other factors such as firm affiliation to an association in the cluster, the association supervision mechanism, media interaction among other also serves as an essential ingredient to breed trust. The study also shows that firms faces a dilemma that lower the level of trust and faith atmosphere in the industrial cluster, therefore the firms, industry association and the government need to make some effort to improve and maintain the relationship and trust between the enterprises in industrial cluster.The innovations of this study are as follows:(1) relying on social networking environment of industrial cluster, this paper mainly examines the current trust level, as well as the trust influence factors;(2) the study establishes a theoretical model of the factors of trust from the perspective of the network embeddedness, including relational embeddedness, structure embeddedness and positional embeddedness;(3) the analysis conducted enables the researcher to differeniate between the factors that are essential for trust building and vice versa;(4) It also focuses on the current trust level of Chinese industrial cluster, and the Zhongshan Gas Appliance Cluster as the sample and this form is a bases to guide future government and industrial policy to boost the trust of firms within the industry cluster.