TRUST-SCALE as Strategic Infrastructure: Explaining How SMEs Convert Credibility into Inclusive Upgrading
Keywords:
SME upgrading, trust orchestration, dynamic capabilities, signaling theory, institutional legitimacy, TRUST-SCALE frameworkAbstract
Small and medium-sized enterprises (SMEs) are widely recognized as drivers of inclusive economic growth, yet many remain trapped in low-productivity trajectories despite access to resources and policy support. Existing literature predominantly explains SME upgrading through capability-based and resource-oriented perspectives, while under-theorizing the role of trust as a generative mechanism. This study addresses this theoretical gap by developing TRUST-SCALE as a conceptual framework that positions trust as a strategically orchestrated infrastructure rather than a passive outcome. Adopting a theory-building approach, the study integrates dynamic capability theory, signaling theory, institutional theory, and trust theory to construct a mechanism-based model explaining how SMEs convert entrepreneurial capability into upgrading outcomes. The framework conceptualizes trust as emerging from two interrelated layers: trust formation and trust scaling, coordinated through informational, behavioral, and institutional mechanisms. The proposed model contributes by reconceptualizing trust as an orchestrated capability, integrating fragmented theoretical streams, and offering a process-based explanation of SME upgrading. It further provides a foundation for future empirical research and the development of measurement instruments to examine trust-driven upgrading across diverse institutional contexts.
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