Abstract
This development paper examines trust in small and medium sized enterprises as an ongoing social evaluation process embedded in reputation work. Trust is not treated as a static interpersonal state. Instead, the paper argues that trust in SME exchange is closely tied to how actors construct and interpret reputational judgements of reliability, legitimacy and risk.
The paper integrates vulnerability based institutional and ability benevolence and integrity perspectives within a social evaluation lens. It shows that continuous reputational assessment including distrust and negative signals shapes governance practices across institutional environments. The paper contributes to contextualised entrepreneurship and trust scholarship by clarifying how institutional conditions influence the role of reputational governance in SME exchange.