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Firm-level trust in emerging markets: the moderating effect on the institutional strength- corruption relationship in Mexico and Peru

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  • Carol M. Sánchez
  • Kevin Lehnert.

Abstract

Emerging market firms often face corruption and institutional weakness in their environments. Firm-level trust may help with these challenges. In these countries, firm-level trust may engage employees and reduce pressure on firms from weak institutions and corruption. This is a study of employees of firms in Mexico and Peru, and it measures perceptions of corruption, trust, and institutional strength. Using confirmatory factor analysis and linear regression, the study tests hypotheses that trust moderates the weak institution - perceived corruption relationship. Findings suggest that trust may help employees be productive despite these challenges. Firms that build trust among employees may be better able to confront the challenges of corrupt and uncertain institutional environments.

Suggested Citation

  • Carol M. Sánchez & Kevin Lehnert., 2018. "Firm-level trust in emerging markets: the moderating effect on the institutional strength- corruption relationship in Mexico and Peru," Estudios Gerenciales, Universidad Icesi, vol. 34(147), pages 127-138, May.
    • Handle: RePEc:col:000129:016500
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    Cited by:

    1. Israel, Alena & Jehling, Mathias, 2019. "How modern are renewables? The misrecognition of traditional solar thermal energy in Peru's energy transition," Energy Policy, Elsevier, vol. 133(C).

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    More about this item

    Keywords

    Corruption; trust; institutions; resource-based view;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration
    • F69 - International Economics - - Economic Impacts of Globalization - - - Other

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