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Trust, positive reciprocity, and negative reciprocity: Do these traits impact entrepreneurial dynamics?

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  • Caliendo, Marco
  • Fossen, Frank
  • Kritikos, Alexander

Abstract

Experimental evidence reveals that there is a strong willingness to trust and to act in both positively and negatively reciprocal ways. So far it is rarely analyzed whether these variables of social cognition influence everyday decision making behavior. We focus on entrepreneurs who are permanently facing exchange processes in the interplay with investors, sellers, and buyers, as well as needing to trust others and reciprocate with their network. We base our analysis on the German Socio-Economic Panel with its recently introduced questions about trust, positive reciprocity, and negative reciprocity to examine the extent that these variables influence the entrepreneurial decision processes. More specifically, we analyze whether (i) the willingness to trust other people influences the probability of starting a business; (ii) trust, positive reciprocity, and negative reciprocity influence the exit probability of entrepreneurs; and (iii) willingness to trust and to act reciprocally influences the probability of being an entrepreneur versus an employee or a manager. Our findings reveal that, in particular, trust impacts entrepreneurial development. Interestingly, entrepreneurs are more trustful than employees, but much less trustful than managers.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Psychology.

Volume (Year): 33 (2012)
Issue (Month): 2 ()
Pages: 394-409

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Handle: RePEc:eee:joepsy:v:33:y:2012:i:2:p:394-409

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Web page: http://www.elsevier.com/locate/joep

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Keywords: Entrepreneurship; Trust; Reciprocity;

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References

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Citations

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Cited by:
  1. Marco Caliendo & Frank Fossen & Alexander Kritikos, 2014. "Personality characteristics and the decisions to become and stay self-employed," Small Business Economics, Springer, vol. 42(4), pages 787-814, April.
  2. Marco Caliendo & Frank Fossen & Alexander Kritikos & Miriam Wetter, 2014. "The Gender Gap in Entrepreneurship: Not Just a Matter of Personality," CESifo Working Paper Series 4803, CESifo Group Munich.
  3. Fritsch, Michael & Kritikos, Alexander S. & Pijnenburg, Katharina, 2013. "Business Cycles, Unemployment and Entrepreneurial Entry: Evidence from Germany," IZA Discussion Papers 7852, Institute for the Study of Labor (IZA).
  4. Caliendo, Marco & Kritikos, Alexander S., 2011. "Searching for the Entrepreneurial Personality: New Evidence and Avenues for Further Research," IZA Discussion Papers 5790, Institute for the Study of Labor (IZA).

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