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The role of trust in government and institutional environment in future business climate

Author

Listed:
  • Gentjan Çera
  • Edmond Çera
  • Humberto Nuno Rito Ribeiro
  • Sadik Maloku

Abstract

Though numerous studies have focused on the relationship between institutional environment shape entrepreneurship, yet it is not clear enough the effects of institutional constraints and institutional trust on future business climate. This study aims to investigate these relationships in the context of a transition country. The research combines two perspectives: institution theory and institutional trust. The data are collected using a face-to-face survey. Three ordinal regressions were performed in a dataset of 393 small and medium-sized enterprises from Albania. The results contribute into understanding the nature of entrepreneurship in a transition setting. After controlling for firm characteristics, analyses revealed that future business climate is negatively influenced by legal environment-related constraints, and positively by trust in government. Thus, favourable business climate can be achieved by applying not heavily business legislation and regulation framework, and by building trust in institution. This paper offers insights for scholars studying entrepreneurship and institutional environments.

Suggested Citation

  • Gentjan Çera & Edmond Çera & Humberto Nuno Rito Ribeiro & Sadik Maloku, 2021. "The role of trust in government and institutional environment in future business climate," International Journal of Entrepreneurial Venturing, Inderscience Enterprises Ltd, vol. 13(5), pages 425-442.
    • Handle: RePEc:ids:ijeven:v:13:y:2021:i:5:p:425-442
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    Citations

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    Cited by:

    1. Mina Nikolaeva Angelova & Daniela Dobreva Pastarmadzhieva & Aleksandar Tsvetanov Naydenov, 2022. "Determinants of the Entrepreneurial Initiative during a Pandemic: The Case of Plovdiv," Sustainability, MDPI, vol. 14(21), pages 1-28, October.
    2. Lushi Isuf & Çera Gentjan & Murrja Arif & Ujkani Sead, 2023. "Linking Farmers’ Bargaining Power in Trade to their Plans for Future Economic Activities," South East European Journal of Economics and Business, Sciendo, vol. 18(2), pages 173-185, December.

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