Trust, poverty, and subjective wellbeing among Chinese entrepreneurs

ABSTRACT

Entrepreneurs’ subjective wellbeing has become an important topic in research: entrepreneurs undertake risks and create their companies seeking personal satisfaction and fulfillment. As a result, researchers have given considerable attention to the antecedents and the conditions under which wellbeing materializes, especially in emerging economies where poverty may be acute. In this study, we propose that generalized trust serves as an informal institution that affects entrepreneurs’ subjective wellbeing. Further, we propose that this relationship is subject to boundary conditions of economic and social poverty as well as context-specific formal institutional features. We test our predictions using a multi-sourced sample of 818 Chinese entrepreneurs. We find that trust is positively associated with entrepreneurs’ subjective wellbeing. This association is moderated by both economic poverty and social poverty. When high or low institutional voids are evident across the different regions of China, the main and moderating effects are further differentiated. The study suggests that, as a mechanism to mitigate the negative effect of lacking formal institutions, the level of trust in different regions is more relevant in social poverty rather than in economic poverty.

KEYWORDS:

• Entrepreneurs’ subjective wellbeing
• trust
• economic poverty
• social poverty
• institutional voids

Acknowledgments

We would like to thank editor, Professors Steven Si, John Cullen, David Ahlstrom and Jiang Wei, and two anonymous reviewers for their insightful suggestions in the PDW and revision process.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. We cannot determine the specific region and its size in the CGSS dataset, because the detailed information of city, county and district is fuzzified to ensure confidentiality. What we can know is whether the respondents belong to a same region.

2. Thanks to one of the reviewers, we compared the urban and rural differences for trust, individual income and social poverty.

Additional information

Funding

This research was supported, in part, by the National Natural Science Foundation of China (Project No.71872043), the MOE (Ministry of Education in China) Project of Humanities and Social Sciences (Project No. 18YJA630097) and the Fundamental Research Funds for the Central Universities.