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Entrepreneurial choices depend on trust: Some global evidence

Author

Listed:
  • Esa Mangeloja

    (University of Jyväskylä)

  • Tomi Ovaska

    (Youngstown State University)

  • Ryo Takashima

    (Sophia University)

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).

Suggested Citation

  • Esa Mangeloja & Tomi Ovaska & Ryo Takashima, 2022. "Entrepreneurial choices depend on trust: Some global evidence," Journal of International Entrepreneurship, Springer, vol. 20(4), pages 564-590, December.
    • Handle: RePEc:kap:jinten:v:20:y:2022:i:4:d:10.1007_s10843-022-00315-0
    DOI: 10.1007/s10843-022-00315-0
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    Cited by:

    1. Edgar Demetrio Tovar-García, 2023. "A note on institutional trust and poverty: evidence from Latin America," Economics and Business Letters, Oviedo University Press, vol. 12(4), pages 313-320.

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    More about this item

    Keywords

    Entrepreneurship; Global Entrepreneurship Monitor (GEM); Index of Economic Freedom (IEF); Trust; World Bank Global Entrepreneurship Surveys (WBGES); World Values Survey (WVS);
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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