Previous studies have found that generalized trust positively affects innovation at the country and regional level. We extend this literature by arguing that there are four reasons to believe that the trust-innovation relationship is heterogeneous across geographic space. First, there is a...

Voluntary certification systems potentially reduce search costs in markets with imperfect information. Service markets with many heterogeneous firms – such as the crafts market – are prone to information imperfections and can therefore potentially benefit from such informational mechanisms....