Dimensions of inter-firm trust: benevolence and credibility

Abstract

Past research on inter-firm trust has noted two dimensions, benevolence and credibility. The credibility dimension of trust has been operationalized variously as a combination of honesty, reliability and expectancy; while benevolence has rarely been examined as a unique dimension. We examine the two trust dimensions with empirical data of inter-firm relationships in the software industry and find that benevolence is strongly associated with relationship performance. No association is found between credibility and relationship performance, when discriminant validity is imposed. This result has important implications, as almost all of the inter-firm empirical research on trust has been based on the credibility dimension or a global measure combining the two dimensions. The research in this chapter suggests that benevolence, where managers perceive the other firm willing to look after their firm’s interests and so the collective interests of both firms moving forward, is the key to business relationship performance.