Does Familiarity Breed Trust? Revisiting the Antecedents of Trust

This paper investigates how the history of interaction between organizations and between organizational boundary spanners contributes to the formation of trust between firms. Our findings, using data on the supplier-buyer relationships of two major US auto manufacturers, suggest that history affects trust formation in a complex non-linear fashion, involving a period of ambivalence early in a relationship. We show that certain kinds of exchange partners can systematically reap differential returns from a common history of interaction. Organizational similarity significantly enhances the ability of exchange partners to translate the benefits of the joint history of interaction into a stock of trust. Copyright (C) 2008 John Wiley & Sons, Ltd.