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Exploring the Relationship Between Trust and Business Start-Ups in 52 Countries Over 16 Years

Author

Listed:
  • Esa Mangeloja

    (Department of Economics ,University of Jyväskylä, Finland)

  • Tomi Ovaska

    (Williamson College of Business Administration, Youngstown State University, USA)

  • Ryo Takashima

    (Department of Global Studies, Sophia University, Japan)

Abstract

A well-functioning social network involves attributes such as honesty, benevolence, fairness and confidence. When this network – trust - has formed, participants can count on reliable and consistent economic transactions. This has the effect of higher level of co-operation, but also co-dependence. Strong social networks, as measured in this study by the degree of interpersonal trust and trust in institutions, are foundational elements for societies wishing to progress to new higher levels of entrepreneurship and development. In a pooled OLS of up to 52 countries and 16 years, this study estimates how changes in interpersonal trust and trust in institutions affect new business creation. The four entrepreneurship categories considered include the total early-stage entrepreneurial activity, new business formation, necessity-driven entrepreneurial activity, and improvement-driven opportunity entrepreneurial activity.

Suggested Citation

  • Esa Mangeloja & Tomi Ovaska & Ryo Takashima, 2021. "Exploring the Relationship Between Trust and Business Start-Ups in 52 Countries Over 16 Years," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 20(1), pages 17-36, June.
    • Handle: RePEc:ijb:journl:v:20:y:2021:i:1:p:17-36
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Entrepreneurship; Improvement-driven Opportunity Entrepreneurial Activity; Institutional Trust; Necessity-driven Entrepreneurial Activity; New Business Density; Total Early-stage Entrepreneurial Activity (TEA); Trust;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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