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Does Trust Matter for Entrepreneurship: Evidence from a Cross-Section of Countries

Department of Economics, University of Kinshasa, Kinshasa, Congo
Department of Economics, Stellenbosch University, Cape Town 7602, South Africa
Author to whom correspondence should be addressed.
Academic Editor: Ralf Fendel
Economies 2016, 4(1), 4;
Received: 16 October 2015 / Revised: 27 January 2016 / Accepted: 23 February 2016 / Published: 4 March 2016
Differences in trust levels between countries explain the observed discrepancies in entrepreneurial spirit amongst them. We test this hypothesis with 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, outliers and alternative conditioning variables. The findings of the study indicate that while formal incentives to nurture entrepreneurship must be maintained, policy makers should also seek to pay attention to the role of trust cultivated through informal networks. View Full-Text
Keywords: trust; institution; entrepreneurship trust; institution; entrepreneurship
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Kodila-Tedika, O.; Agbor, J. Does Trust Matter for Entrepreneurship: Evidence from a Cross-Section of Countries. Economies 2016, 4, 4.

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