IDEAS home Printed from https://ideas.repec.org/a/kap/jinten/v20y2022i4d10.1007_s10843-022-00315-0.html
   My bibliography  Save this article

Entrepreneurial choices depend on trust: Some global evidence

Author

Listed:
  • Esa Mangeloja

    (University of Jyväskylä)

  • Tomi Ovaska

    (Youngstown State University)

  • Ryo Takashima

    (Sophia University)

Abstract

Interpersonal trust and people’s trust in institutions are important components of social capital, which has been shown to have not only innate social value but also diverse direct and indirect positive social and economic impacts. Using data for an economically and globally diverse group of countries, we examine empirically how changes in interpersonal trust and trust in institutions affect entrepreneurship over time. Our findings suggest that (1) enhancing either type of trust leads to more entrepreneurial activity and (2) an increase in interpersonal trust causes a structural change in the composition of the TEA-type entrepreneurship. Increased trust reduces the share of relatively lower value-added necessity-driven entrepreneurial activity and increases the share of higher value-added improvement-driven opportunity entrepreneurial activity (Schumpeterian entrepreneurship).

Suggested Citation

  • Esa Mangeloja & Tomi Ovaska & Ryo Takashima, 2022. "Entrepreneurial choices depend on trust: Some global evidence," Journal of International Entrepreneurship, Springer, vol. 20(4), pages 564-590, December.
    • Handle: RePEc:kap:jinten:v:20:y:2022:i:4:d:10.1007_s10843-022-00315-0
    DOI: 10.1007/s10843-022-00315-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10843-022-00315-0
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10843-022-00315-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ernst Fehr & Simon Gächter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 159-181, Summer.
    2. Oasis Kodila-Tedika & Julius Agbor, 2016. "Does Trust Matter for Entrepreneurship: Evidence from a Cross-Section of Countries," Economies, MDPI, vol. 4(1), pages 1-17, March.
    3. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
    4. Vicente Salas-Fumás & J. Javier Sanchez-Asin, 2013. "The management function of entrepreneurs and countries’ productivity growth," Applied Economics, Taylor & Francis Journals, vol. 45(17), pages 2349-2360, June.
    5. Hodgson, Geoffrey M., 2012. "From Pleasure Machines to Moral Communities," University of Chicago Press Economics Books, University of Chicago Press, number 9780226922713, June.
    6. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1251-1288.
    7. Zoltan Acs & José Amorós, 2008. "Entrepreneurship and competitiveness dynamics in Latin America," Small Business Economics, Springer, vol. 31(3), pages 305-322, October.
    8. Dmitriy Krichevskiy & Thomas Snyder, 2015. "U.S. State Government policies and entrepreneurship," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 4(1), pages 102-110, April.
    9. María-Teresa Méndez-Picazo & Miguel-Ángel Galindo-Martín & Domingo Ribeiro-Soriano, 2012. "Governance, entrepreneurship and economic growth," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 24(9-10), pages 865-877, December.
    10. Mariano Nieto & Nuria González-Álvarez, 2016. "Social capital effects on the discovery and exploitation of entrepreneurial opportunities," International Entrepreneurship and Management Journal, Springer, vol. 12(2), pages 507-530, June.
    11. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross‐Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
    12. Elvin Afandi & Majid Kermani & Fuad Mammadov, 2017. "Social capital and entrepreneurial process," International Entrepreneurship and Management Journal, Springer, vol. 13(3), pages 685-716, September.
    13. Shenggang Ren & Rui Shu & Yongchuan Bao & Xiaohong Chen, 2016. "Linking network ties to entrepreneurial opportunity discovery and exploitation: the role of affective and cognitive trust," International Entrepreneurship and Management Journal, Springer, vol. 12(2), pages 465-485, June.
    14. Travis Wiseman, 2015. "Entrepreneurship, corruption, and the size of US underground economies," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 4(3), pages 313-330, November.
    15. Bruni, Luigino & Sugden, Robert, 2000. "Moral canals: trust and social capital in the work of Hume, Smith and Genovesi," Economics and Philosophy, Cambridge University Press, vol. 16(1), pages 21-45, April.
    16. John Mann & David Shideler, 2015. "Measuring Schumpeterian activity using a composite indicator," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 4(1), pages 57-84, April.
    17. Travis Wiseman, 2015. "Entrepreneurship, corruption, and the size of US underground economies," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 4(3), pages 313-330, November.
    18. Knack, Stephen & Keefer, Philip, 1995. "Institutions and Economic Performance: Cross-Country Tests Using Alternative Institutional Indicators," MPRA Paper 23118, University Library of Munich, Germany.
    19. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2004. "The Role of Social Capital in Financial Development," American Economic Review, American Economic Association, vol. 94(3), pages 526-556, June.
    20. Zoltán J. Ács & Sameeksha Desai & Leora F. Klapper, 2015. "What does ‘‘entrepreneurship’’ data really show?," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 24, pages 464-480, Edward Elgar Publishing.
    21. Mickiewicz, Tomasz & Rebmann, Anna, 2020. "Entrepreneurship as Trust," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 16(3), pages 244-309, February.
    22. Christian Bjørnskov & Nicolai Foss, 2010. "Economic Freedom and Entrepreneurial Activity: Some Cross-Country Evidence," Springer Books, in: Andreas Freytag & Roy Thurik (ed.), Entrepreneurship and Culture, chapter 0, pages 201-225, Springer.
    23. Shaker A. Zahra & R. Isil Yavuz & Deniz Ucbasaran, 2006. "How Much do you Trust Me? The Dark Side of Relational Trust in New Business Creation in Established Companies," Entrepreneurship Theory and Practice, , vol. 30(4), pages 541-559, July.
    24. Akçomak, I. Semih & ter Weel, Bas, 2009. "Social capital, innovation and growth: Evidence from Europe," European Economic Review, Elsevier, vol. 53(5), pages 544-567, July.
    25. Boris Bauke & Thorsten Semrau & Zheng Han, 2016. "Relational trust and new ventures’ performance: the moderating impact of national-level institutional weakness," International Entrepreneurship and Management Journal, Springer, vol. 12(4), pages 1007-1024, December.
    26. Kristina Nyström, 2008. "The institutions of economic freedom and entrepreneurship: evidence from panel data," Public Choice, Springer, vol. 136(3), pages 269-282, September.
    27. Farzana Chowdhury & Siri Terjesen & David Audretsch, 2015. "Varieties of entrepreneurship: institutional drivers across entrepreneurial activity and country," European Journal of Law and Economics, Springer, vol. 40(1), pages 121-148, August.
    28. Mourad Dakhli & Dirk De Clercq, 2004. "Human capital, social capital, and innovation: a multi-country study," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 16(2), pages 107-128, March.
    29. Bill McEvily & Vincenzo Perrone & Akbar Zaheer, 2003. "Trust as an Organizing Principle," Organization Science, INFORMS, vol. 14(1), pages 91-103, February.
    30. Jeffery S. McMullen & D. Ray Bagby & Leslie E. Palich, 2008. "Economic Freedom and the Motivation to Engage in Entrepreneurial Action," Entrepreneurship Theory and Practice, , vol. 32(5), pages 875-895, September.
    31. John Mann & David Shideler, 2015. "Measuring Schumpeterian activity using a composite indicator," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 4(1), pages 57-84, April.
    32. Yákara Vasconcelos Pereira Leite & Walter Fernando Araújo Moraes & Viviane Santos Salazar, 2016. "Expressions of Relationship Networking in International Entrepreneurship," Journal of International Entrepreneurship, Springer, vol. 14(2), pages 213-238, June.
    33. Anguera-Torrell, Oriol, 2020. "Entrepreneurship, trust and corruption," European Journal of Political Economy, Elsevier, vol. 65(C).
    34. Guido Alfani & Vincent Gourdon, 2012. "Entrepreneurs, formalization of social ties, and trustbuilding in Europe (fourteenth to twentieth centuries)," Economic History Review, Economic History Society, vol. 65(3), pages 1005-1028, August.
    35. Farzana Chowdhury & David B. Audretsch, 2021. "A dynamic relationship between entrepreneurial orientation and entrepreneurial activity," Journal of International Entrepreneurship, Springer, vol. 19(3), pages 339-356, September.
    36. Christopher Schlaegel & Robert L. Engle & Nicole Franziska Richter & Pia Christin Taureck, 2021. "Personal factors, entrepreneurial intention, and entrepreneurial status: A multinational study in three institutional environments," Journal of International Entrepreneurship, Springer, vol. 19(3), pages 357-398, September.
    37. Dearmon, Jacob & Grier, Kevin, 2009. "Trust and development," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 210-220, August.
    38. Dmitriy Krichevskiy & Thomas Snyder, 2015. "U.S. State Government policies and entrepreneurship," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 4(1), pages 102-110, April.
    39. Tebogo Rahaba Ngoma, 2016. "It is not whom you know, it is how well you know them: Foreign entrepreneurs building close guanxi relationships [Es geht nicht darum, wen du kennst, sondern wie gut du sie kennst: Wie ausländische," Journal of International Entrepreneurship, Springer, vol. 14(2), pages 239-258, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Edgar Demetrio Tovar-García, 2023. "A note on institutional trust and poverty: evidence from Latin America," Economics and Business Letters, Oviedo University Press, vol. 12(4), pages 313-320.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Méon, Pierre-Guillaume & Sekkat, Khalid, 2015. "The formal and informal institutional framework of capital accumulation," Journal of Comparative Economics, Elsevier, vol. 43(3), pages 754-771.
    3. Christian Bjørnskov & Pierre-Guillaume Méon, 2013. "Is trust the missing root of institutions, education, and development?," Post-Print CEB, ULB -- Universite Libre de Bruxelles, vol. 157(3-4), pages 641-669, December.
    4. Christian Bjørnskov & Pierre-Guillaume Méon, 2015. "The productivity of trust," Post-Print CEB, ULB -- Universite Libre de Bruxelles, June.
    5. Peiró-Palomino, Jesús & Tortosa-Ausina, Emili, 2013. "Can trust effects on development be generalized? A response by quantile," European Journal of Political Economy, Elsevier, vol. 32(C), pages 377-390.
    6. Ndubuisi, Gideon, 2020. "Trust and R&D investments: evidence from OECD countries," Journal of Institutional Economics, Cambridge University Press, vol. 16(6), pages 809-830, December.
    7. Kim, Byung-Yeon & Kang, Youngho, 2014. "Social capital and entrepreneurial activity: A pseudo-panel approach," Journal of Economic Behavior & Organization, Elsevier, vol. 97(C), pages 47-60.
    8. Oasis Kodila-Tedika & Julius Agbor, 2016. "Does Trust Matter for Entrepreneurship: Evidence from a Cross-Section of Countries," Economies, MDPI, vol. 4(1), pages 1-17, March.
    9. Forte, Anabel & Peiró-Palomino, Jesús & Tortosa-Ausina, Emili, 2015. "Does social capital matter for European regional growth?," European Economic Review, Elsevier, vol. 77(C), pages 47-64.
    10. Jesús Peiró-Palomino, 2016. "Social Capital and Economic Growth in Europe: Nonlinear Trends and Heterogeneous Regional Effects," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(5), pages 717-751, October.
    11. Jalan, Akanksha & Matkovskyy, Roman & Urquhart, Andrew & Yarovaya, Larisa, 2023. "The role of interpersonal trust in cryptocurrency adoption," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 83(C).
    12. Gioacchino Fazio & Francesca Giambona & Erasmo Vassallo & Elli Vassiliadis, 2018. "A Measure of Trust: The Italian Regional Divide in a Latent Class Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 140(1), pages 209-242, November.
    13. In Do Hwang, 2017. "Which Type of Trust Matters?:Interpersonal vs. Institutional vs. Political Trust," Working Papers 2017-15, Economic Research Institute, Bank of Korea.
    14. Rania S. Miniesy & Mariam AbdelKarim, 2021. "Generalized Trust and Economic Growth: The Nexus in MENA Countries," Economies, MDPI, vol. 9(1), pages 1-22, March.
    15. Mina Baliamoune‐Lutz, 2009. "Human Well‐Being Effects Of Institutions And Social Capital," Contemporary Economic Policy, Western Economic Association International, vol. 27(1), pages 54-66, January.
    16. Claudia Alvarez & José Ernesto Amorós & David Urbano, 2014. "Regulations and Entrepreneurship: Evidence from Developed and Developing Countries," Past Working Papers 02, Universidad del Desarrollo, School of Business and Economics, revised Nov 2014.
    17. Jesús Peiró-Palomino, 2016. "European regional convergence revisited: the role of intangible assets," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 57(1), pages 165-194, July.
    18. Baliamoune-Lutz, Mina, 2011. "Trust-based social capital, institutions, and development," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 335-346, August.
    19. Sheila M. Puffer & Daniel J. McCarthy & Max Boisot, 2010. "Entrepreneurship in Russia and China: The Impact of Formal Institutional Voids," Entrepreneurship Theory and Practice, , vol. 34(3), pages 441-467, May.
    20. İ. Semih Akçomak & Hanna Müller-Zick, 2018. "Trust and inventive activity in Europe: causal, spatial and nonlinear forces," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 60(3), pages 529-568, May.

    More about this item

    Keywords

    Entrepreneurship; Global Entrepreneurship Monitor (GEM); Index of Economic Freedom (IEF); Trust; World Bank Global Entrepreneurship Surveys (WBGES); World Values Survey (WVS);
    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
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jinten:v:20:y:2022:i:4:d:10.1007_s10843-022-00315-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.