Advanced Search
MyIDEAS: Login to save this paper or follow this series

Does Trust Matter For Entrepreuneurship : Evidence From A Cross-Section Of Countries

Contents:

Author Info

  • Kodila-Tedika, Oasis
  • Agbor Agbor, Julius

Abstract

To the extent that trust is necessary to conduct informal sector business activities, its absence could possibly constrain entrepreneurial spirit and overall economic growth. This paper tests the hypothesis that differences in trust levels between countries explain the observed differences in entrepreneurial spirit amongst them. Analyzing a cross-section of 60 countries in 2010, our findings suggest that about half of the variation in entrepreneurial spirit across countries in the world is driven by trust considerations. This result is robust to regional clustering and to alternative conditioning variables. The findings of the study suggest that while formal incentives to nurture entrepreneurship must be maintained, policy-makers should also pay attention to the role of trust cultivated through informal networks.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://mpra.ub.uni-muenchen.de/42292/
File Function: original version
Download Restriction: no

File URL: http://mpra.ub.uni-muenchen.de/46306/
File Function: revised version
Download Restriction: no

Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 42292.

as in new window
Length:
Date of creation: 29 Oct 2012
Date of revision:
Handle: RePEc:pra:mprapa:42292

Contact details of provider:
Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC

Related research

Keywords: Entrepreneurship; Trust; Institutions;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Potrafke, Niklas, 2012. "Intelligence and corruption," Economics Letters, Elsevier, Elsevier, vol. 114(1), pages 109-112.
  2. Christian Bjørnskov & Nicolai J. Foss, 2006. "Economic Freedom and entrepreneurial Activity Some Cross-Country Evidence," DRUID Working Papers, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies 06-18, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  3. Bjrnskov, Christian, 2009. "Social trust and the growth of schooling," Economics of Education Review, Elsevier, Elsevier, vol. 28(2), pages 249-257, April.
  4. Sjoerd Beugelsdijk & Henri L.F. de Groot & Anton B.T.M. van Schaik, 2002. "Trust and Economic Growth," Tinbergen Institute Discussion Papers, Tinbergen Institute 02-049/3, Tinbergen Institute.
  5. Bjornskov, Christian & Dreher, Axel & Fischer, Justina AV, 2008. "Formal Institutions and Subjective Well-Being: Revisiting the Cross-Country Evidence," MPRA Paper, University Library of Munich, Germany 20488, University Library of Munich, Germany, revised 06 Feb 2010.
  6. Israel M. Kirzner, 1997. "Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 35(1), pages 60-85, March.
  7. John F. Helliwell & Robert D. Putnam, 1995. "Economic Growth and Social Capital in Italy," Eastern Economic Journal, Eastern Economic Association, Eastern Economic Association, vol. 21(3), pages 295-307, Summer.
  8. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 115(3), pages 811-846, August.
  9. Alesina, Alberto & La Ferrara, Eliana, 2002. "Who trusts others?," Journal of Public Economics, Elsevier, Elsevier, vol. 85(2), pages 207-234, August.
  10. Niclas Berggren & Henrik Jordahl, 2006. "Free to Trust: Economic Freedom and Social Capital," Kyklos, Wiley Blackwell, Wiley Blackwell, vol. 59(2), pages 141-169, 05.
  11. Berggren, Niclas & Elinder, Mikael & Jordahl, Henrik, 2007. "Trust and Growth: A Shaky Relationship," Working Paper Series, Research Institute of Industrial Economics 705, Research Institute of Industrial Economics.
  12. Delhey, Jan & Newton, Kenneth, 2004. "Social trust: Global pattern or nordic exceptionalism?," Discussion Papers, Research Unit: Inequality and Social Integration, Social Science Research Center Berlin (WZB) SP I 2004-202, Social Science Research Center Berlin (WZB).
  13. Henrekson, Magnus, 2002. "Entrepreneurship: A Weak Link in the Welfare State," Working Paper Series in Economics and Finance, Stockholm School of Economics 518, Stockholm School of Economics, revised 04 Mar 2005.
  14. Christian Bjørnskov & Pierre-Guillaume Méon, 2010. "The productivity of trust," Working Papers CEB, ULB -- Universite Libre de Bruxelles 10-042, ULB -- Universite Libre de Bruxelles.
  15. Greif, Avner, 1989. "Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 49(04), pages 857-882, December.
  16. Frank A.G. den Butter & Robert H.J. Mosch, 2003. "Trade, Trust and Transaction Cost," Tinbergen Institute Discussion Papers, Tinbergen Institute 03-082/3, Tinbergen Institute.
  17. Christian Bjørnskov, 2010. "How does social trust lead to better governance? An attempt to separate electoral and bureaucratic mechanisms," Public Choice, Springer, Springer, vol. 144(1), pages 323-346, July.
  18. La Porta, Rafael, et al, 1997. "Trust in Large Organizations," American Economic Review, American Economic Association, American Economic Association, vol. 87(2), pages 333-38, May.
  19. Rose, Richard, 2000. "How much does social capital add to individual health?A survey study of Russians," Social Science & Medicine, Elsevier, Elsevier, vol. 51(9), pages 1421-1435, November.
  20. Zoltan Acs, 2006. "How Is Entrepreneurship Good for Economic Growth?," Innovations: Technology, Governance, Globalization, MIT Press, MIT Press, vol. 1(1), pages 97-107, March.
  21. Heckelman, Jac C & Stroup, Michael D, 2000. "Which Economic Freedoms Contribute to Growth?," Kyklos, Wiley Blackwell, Wiley Blackwell, vol. 53(4), pages 527-44.
  22. Edward P. Lazear, 2004. "Balanced Skills and Entrepreneurship," American Economic Review, American Economic Association, American Economic Association, vol. 94(2), pages 208-211, May.
  23. Bergh, Andreas & Bjørnskov, Christian, 2009. "Historical Trust Levels Predict Current Welfare State Design," Ratio Working Papers, The Ratio Institute 144, The Ratio Institute.
  24. Audretsch, David B. & Keilbach, Max C. & Lehmann, Erik E., 2006. "Entrepreneurship and Economic Growth," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780195183511, October.
  25. Paul F. Whiteley, 2000. "Economic Growth and Social Capital," Political Studies, Political Studies Association, Political Studies Association, vol. 48(3), pages 443-466, 06.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Kodila-Tedika, Oasis, 2012. "Entrepreneurship and property right: de Soto'r right
    [Entrepreneuriat et droit de propriété : de Soto a raison]
    ," MPRA Paper, University Library of Munich, Germany 43464, University Library of Munich, Germany.
  2. Asongu, Simplice A. & Kodila-Tedika, Oasis, 2013. "Trust and Prosperity: A Conditional Relationship," MPRA Paper, University Library of Munich, Germany 46865, University Library of Munich, Germany, revised 15 Jun 2013.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:42292. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.