Entrepreneurial choices depend on trust: Some global evidence

Esa Mangeloja (), Tomi Ovaska () and Ryo Takashima ()
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Esa Mangeloja: University of Jyväskylä
Tomi Ovaska: Youngstown State University
Ryo Takashima: Sophia University

Journal of International Entrepreneurship, 2022, vol. 20, issue 4, No 3, 564-590

Abstract: 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).

Keywords: Entrepreneurship; Global Entrepreneurship Monitor (GEM); Index of Economic Freedom (IEF); Trust; World Bank Global Entrepreneurship Surveys (WBGES); World Values Survey (WVS); Global Entrepreneurship Monitor (GEM); Unternehmertum; Vertrauensarten; Wirtschaftliche Freiheit (IEF); Weltbank Globale Erhebungen zum Unternehmertum (WBGES); Weltweite Umfrage über Werte (WVS); D02; H11; M13; Z13 (search for similar items in EconPapers)
JEL-codes: D02 H11 Z13 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10843-022-00315-0

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