Does Trust Matter For Entrepreuneurship : Evidence From A Cross-Section Of Countries
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.
|Date of creation:||29 Oct 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
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.:
- Audretsch, David B. & Keilbach, Max C. & Lehmann, Erik E., 2006. "Entrepreneurship and Economic Growth," OUP Catalogue, Oxford University Press, number 9780195183511, July.
- Delhey, Jan & Newton, Kenneth, 2004. "Social trust: Global pattern or nordic exceptionalism?," Discussion Papers, Research Unit: Inequality and Social Integration SP I 2004-202, Social Science Research Center Berlin (WZB).
- Frank A.G. den Butter & Robert H.J. Mosch, 2003. "Trade, Trust and Transaction Cost," Tinbergen Institute Discussion Papers 03-082/3, Tinbergen Institute.
- Berggren, Niclas & Elinder, Mikael & Jordahl, Henrik, 2007.
"Trust and Growth: A Shaky Relationship,"
Working Paper Series
705, Research Institute of Industrial Economics.
- John F. Helliwell & Robert D. Putnam, 1995. "Economic Growth and Social Capital in Italy," Eastern Economic Journal, Eastern Economic Association, vol. 21(3), pages 295-307, Summer.
- Paul F. Whiteley, 2000. "Economic Growth and Social Capital," Political Studies, Political Studies Association, vol. 48(3), pages 443-466, 06.
- Israel M. Kirzner, 1997. "Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 60-85, March.
- repec:oup:qjecon:v:115:y:2000:i:3:p:811-846 is not listed on IDEAS
- Potrafke, Niklas, 2012.
"Intelligence and corruption,"
Munich Reprints in Economics
19275, University of Munich, Department of Economics.
- Niklas Potrafke, 2011. "Intelligence and Corruption," Working Paper Series of the Department of Economics, University of Konstanz 2011-36, Department of Economics, University of Konstanz.
- Niclas Berggren & Henrik Jordahl, 2006.
"Free to Trust: Economic Freedom and Social Capital,"
Wiley Blackwell, vol. 59(2), pages 141-169, 05.
- Berggren, Niclas & Jordahl, Henrik, 2005. "Free to Trust? Economic Freedom and Social Capital," Working Paper Series 2005:2, Uppsala University, Department of Economics.
- Berggren, Niclas & Jordahl, Henrik, 2005. "Free to Trust? Economic Freedom and Social Capital," Ratio Working Papers 64, The Ratio Institute.
- Bjornskov, Christian & Fischer, Justina AV & Dreher, Axel, 2008.
"Formal Institutions and Subjective Well-Being: Revisiting the Cross-Country Evidence,"
17159, University Library of Munich, Germany, revised Jul 2009.
- Bjørnskov, Christian & Dreher, Axel & Fischer, Justina A.V., 2010. "Formal institutions and subjective well-being: Revisiting the cross-country evidence," European Journal of Political Economy, Elsevier, vol. 26(4), pages 419-430, December.
- Bjørnskov, Christian & Dreher, Axel & Fischer, Justina AV, 2008. "Formal Institutions and Subjective Well-Being: Revisiting the Cross-Country Evidence," SSE/EFI Working Paper Series in Economics and Finance 699, Stockholm School of Economics.
- Christian Bjørnskov & Axel Dreher & Justina A.V. Fischer, 2008. "Formal Institutions and Subjective Well-Being: Revisiting the Cross-Country Evidence," KOF Working papers 08-192, KOF Swiss Economic Institute, ETH Zurich.
- Bjornskov, Christian & Dreher, Axel & Fischer, Justina AV, 2008. "Formal Institutions and Subjective Well-Being: Revisiting the Cross-Country Evidence," MPRA Paper 20488, University Library of Munich, Germany, revised 06 Feb 2010.
- repec:tpr:qjecon:v:115:y:2000:i:3:p:811-846 is not listed on IDEAS
- Bergh, Andreas & Bjørnskov, Christian, 2009. "Historical Trust Levels Predict Current Welfare State Design," Ratio Working Papers 144, The Ratio Institute.
- Christian Bjørnskov, 2010. "How does social trust lead to better governance? An attempt to separate electoral and bureaucratic mechanisms," Public Choice, Springer, vol. 144(1), pages 323-346, July.
- Christian Bjørnskov & Nicolai J. Foss, 2006.
"Economic Freedom and entrepreneurial Activity Some Cross-Country Evidence,"
DRUID Working Papers
06-18, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- Christian Bjørnskov & Nicolai Foss, 2008. "Economic freedom and entrepreneurial activity: Some cross-country evidence," Public Choice, Springer, vol. 134(3), pages 307-328, March.
- Bjørnskov, Christian, 2007.
"Social trust and the growth of schooling,"
07-6, University of Aarhus, Aarhus School of Business, Department of Economics.
- Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert W. Vishny, 1996.
"Trust in Large Organizations,"
NBER Working Papers
5864, National Bureau of Economic Research, Inc.
- Magnus Henrekson, 2005.
"Entrepreneurship: a weak link in the welfare state?,"
Industrial and Corporate Change,
Oxford University Press, vol. 14(3), pages 437-467, June.
- Henrekson, Magnus, 2002. "Entrepreneurship: A Weak Link in the Welfare State," SSE/EFI Working Paper Series in Economics and Finance 518, Stockholm School of Economics, revised 04 Mar 2005.
- Christian Bjørnskov & Pierre-Guillaume Méon, 2010.
"The productivity of trust,"
Working Papers CEB
10-042, ULB -- Universite Libre de Bruxelles.
- Heckelman, Jac C & Stroup, Michael D, 2000. "Which Economic Freedoms Contribute to Growth?," Kyklos, Wiley Blackwell, vol. 53(4), pages 527-44.
- Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
- Alesina, Alberto & La Ferrara, Eliana, 2002.
"Who trusts others?,"
Journal of Public Economics,
Elsevier, vol. 85(2), pages 207-234, August.
- Greif, Avner, 1989. "Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 857-882, December.
- Zoltan Acs, 2006. "How Is Entrepreneurship Good for Economic Growth?," Innovations: Technology, Governance, Globalization, MIT Press, vol. 1(1), pages 97-107, March.
- Edward P. Lazear, 2004. "Balanced Skills and Entrepreneurship," American Economic Review, American Economic Association, vol. 94(2), pages 208-211, May.
- Rose, Richard, 2000. "How much does social capital add to individual health?A survey study of Russians," Social Science & Medicine, Elsevier, vol. 51(9), pages 1421-1435, November.
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 references are entirely missing, you can add them using this form.