Trust, poverty, and subjective wellbeing among Chinese entrepreneurs

Yiyi Su, Shaker A. Zahra, Rui Li and Di Fan

Entrepreneurship & Regional Development, 2020, vol. 32, issue 1-2, 221-245

Abstract: Entrepreneurs’ subjective wellbeing has become an important topic in research: entrepreneurs undertake risks and create their companies seeking personal satisfaction and fulfillment. As a result, researchers have given considerable attention to the antecedents and the conditions under which wellbeing materializes, especially in emerging economies where poverty may be acute. In this study, we propose that generalized trust serves as an informal institution that affects entrepreneurs’ subjective wellbeing. Further, we propose that this relationship is subject to boundary conditions of economic and social poverty as well as context-specific formal institutional features. We test our predictions using a multi-sourced sample of 818 Chinese entrepreneurs. We find that trust is positively associated with entrepreneurs’ subjective wellbeing. This association is moderated by both economic poverty and social poverty. When high or low institutional voids are evident across the different regions of China, the main and moderating effects are further differentiated. The study suggests that, as a mechanism to mitigate the negative effect of lacking formal institutions, the level of trust in different regions is more relevant in social poverty rather than in economic poverty.

Date: 2020
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DOI: 10.1080/08985626.2019.1640483

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