Dynamics of social trust and human capital in the learning process: The case of the Japan garment cluster in the period 1968-2005

This paper examined how and the extent to which human capital and social trust are associated with the learning process of a manager in making operations decisions through experience. To this end, using a data set originally and purposively constructed by the author, I investigate the development and transformation of the garment industry cluster region of Kojima, Japan. The major findings through statistical estimations are as follows. (1) In the cluster development stage, the social trust of an enterprise and its manager’s experiences in firm operations could be regarded as forming a complimentary association. (2) In the stage following cluster development, however, a manager’s human capital as accumulated through schooling and personal experience becomes complimentary instead of social trust.