Journal of Small Business and Entrepreneurship Development

Trust and Innovation: Small and Medium Enterprises within Global Value Chains in Northern Mexico
Alejandro Valenzuela, Oscar F. Contreras

Abstract
This paper presents the results of a study conducted in 2011 in Sonora State, Northern Mexico, a regional environment populated by large multinational corporations and where small firms face many difficulties to innovate and participate in global value chains. The relation between trust and technological innovation in SMEs (Small and Medium Enterprises) is analyzed under the assumption that trust reduces uncertainty and transaction costs by replacing the incomplete information in the client-supplier relation. Trust has been classified in three dimensions: normative (based on honesty and good will), technical (based on technical skills) and strategic (based on leadership and prestige). Results indicate that the influence of normative and strategic trust is indirect since both are mediated by learning processes resulting from the client-supplier relation, meanwhile technical trust exerts a direct influence on innovation.

Full Text: PDF     DOI: 10.15640/jsbed.v2n3-4a4