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Entrepreneurial choices depend on trust: Some global evidence

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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).

Zusammenfassung

Zwischenmenschliches Vertrauen und das Vertrauen der Menschen in Institutionen sind wichtige Bestandteile des Sozialkapitals, das nachweislich sowohl einen eigenen sozialen Wert, als auch vielfältige direkte und indirekte positive soziale und wirtschaftliche Auswirkungen besitzt. Anhand von Daten von einer wirtschaftlich und global vielfältigen Gruppe von Ländern untersuchen wir empirisch, wie sich Veränderungen des zwischenmenschlichen Vertrauens und des Vertrauens in Institutionen im Laufe der Zeit auf das Unternehmertum auswirken. Unsere Ergebnisse deuten auf folgendes hin: 1) die Stärkung beider Vertrauensartenrten führt zu mehr unternehmerischer Aktivität und 2) eine Zunahme des zwischenmenschlichen Vertrauens bewirkt eine strukturelle Veränderung in der Zusammensetzung des Unternehmertums vom TEA-Typ. Erhöhtes Vertrauen reduziert den Anteil der relativ wenig wertschöpfenden notwendigkeitsgetriebenen unternehmerischen Tätigkeit und erhöht den Anteil der höheren wertschöpfungsorientierten verbesserungsgetriebenen unternehmerischen Tätigkeit (Schumpeterianisches Unternehmertum).

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Fig. 1

Source: adapted from Wennekers and Thurik (1999) and Ovaska (2014)

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Acknowledgements

The authors would like to thank the editor and the anonymous referee who kindly reviewed the earlier version of this manuscript and provided valuable suggestions and comments.

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Authors and Affiliations

  1. School of Business and Economics, Economics, University of Jyväskylä, Jyväskylä, Finland

    Esa Mangeloja

  2. Williamson School of Business Administration, Youngstown State University, Youngstown, OH, USA

    Tomi Ovaska

  3. Department of Global Studies, Sophia University, Tokyo, Japan

    Ryo Takashima

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  1. Esa Mangeloja
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  2. Tomi Ovaska
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  3. Ryo Takashima
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Correspondence to Tomi Ovaska.

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Appendix

Appendix

Table 4

Table 4 Impact of trust on entrepreneurship: random effects model
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Table 5

Table 5 Impact of trust on necessity- and improvement-driven opportunity entrepreneurial activity: random effects model
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Table 6

Table 6 Correlation matrix (1999–2004, 2005–2009, 2010–2014)
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Table 7

Table 7 List of countries
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Mangeloja, E., Ovaska, T. & Takashima, R. Entrepreneurial choices depend on trust: Some global evidence. J Int Entrep 20, 564–590 (2022). https://doi.org/10.1007/s10843-022-00315-0

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