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“We Know Their House, Family, and Workplace”: Trust in entrepreneurs’ trade credit relationships in weak institutions

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  • Isaac Oduro Amoako
  • Cynthia Akwei
  • Isaac Damoah

Abstract

This study explores the processes of trade credit relationship development and enforcement by small and medium-sized enterprise (SME) entrepreneurs and the role of trust in a developing economy context. Drawing on institutional, trade credit and trust theories, data were collected and analyzed from 16 SMEs owner/managers trading across cultures using qualitative interview approach and thematic analysis. The results show that SMEs develop and enforce trade credit relationships through their embeddedness in institutional contexts. They use personal trust and specific social–cultural norms in the enforcement of trade credit agreements in absence of formal institutional trust. Conclusion, implications, limitations, and further studies are delineated.

Suggested Citation

  • Isaac Oduro Amoako & Cynthia Akwei & Isaac Damoah, 2021. "“We Know Their House, Family, and Workplace”: Trust in entrepreneurs’ trade credit relationships in weak institutions," Journal of Small Business Management, Taylor & Francis Journals, vol. 59(6), pages 1097-1126, November.
    • Handle: RePEc:taf:ujbmxx:v:59:y:2021:i:6:p:1097-1126
    DOI: 10.1111/jsbm.12488
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    Cited by:

    1. Christopher Pryor & Shaker A. Zahra & Garry D. Bruton, 2023. "Trusting without a Safety Net: The Peril of Trust in Base of the Pyramid Economies," Journal of Management Studies, Wiley Blackwell, vol. 60(4), pages 767-799, June.

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