A cross-national study of entrepreneurial intent: the contextual effect of social trust and trust in government

Abstract

This multilevel, cross–national study examines the influence of social trust and trust in government on latent entrepreneurs’ intention to start a business. Building upon the theory of institutional hierarchy and social relations, this research shows that the negative impact of fear of business failure on entrepreneurial intention varies across countries. Results indicate that such a negative relationship is weaker in countries with higher levels of social trust and trust in government. In other words, in a trusting environment, a sense of uncertainty and lack of control of start–up issues may be mitigated by conflict compromise and efficient exchange of information among agents. Such understanding has profound academic, policy and business implications in both developing and developed nations.

RÉSUMÉ

Cette étude multiniveaux et transnationale examine l’influence de la confiance sociale et de la confiance dans le gouvernement sur l’intention latente des entrepreneurs de créer une entreprise. S’appuyant sur la théorie de la hiérarchie institutionnelle et des relations sociales, cette recherche montre que l’impact négatif de la peur de l’échec de l’entreprise sur l’intention d’entreprendre varie d’un pays à l’autre. Les résultats indiquent que cette relation négative est plus faible dans les pays où les niveaux de confiance sociale et de confiance dans le gouvernement sont plus élevés. En d’autres termes, dans un environnement de confiance, le sentiment d’incertitude et de manque de contrôle sur les questions de démarrage d’une entreprise peuvent être atténués par un compromis sur les conflits et un échange efficace d’informations entre les agents. Une telle compréhension a de profondes implications académiques, politiques et commerciales tant dans les pays en développement que dans les pays développés.

Keywords:

• Fear of failure
• entrepreneurial intent
• trust
• Global Entrepreneurship Monitor

MOTS-CLÉS:

• Peur de l’échec
• Intention entrepreneuriale
• Confiance
• Observatoire mondial de l’entrepreneuriat

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Amirhossein Maleki

Dr. Amirhossein Maleki is an Assistant Professor of Management at Northeastern Illinois University, Chicago, Illinois. His current research interests include the impact of public policy and formal/informal institutions on the entrepreneurship process through cross–level and cross–national analysis.

Charles Funk

Dr. Charles Funk is an Associate Professor of Management at Northeastern Illinois University, Chicago, Illinois. He received his Ph.D. from Washington State University, Pullman, Washington. Charles’ current research focuses on country–of–origin effects and strategic alliance formation, evolution and management.

Kaveh Moghaddam

Dr. Kaveh Moghaddam is an Associate Professor of Management at the University of Houston-Victoria. He received a Ph.D. Degree in Strategic Management and International Business from Old Dominion University in Virginia. He has published in such academic journals as Journal of International Management and Strategic Entrepreneurship Journal.

Mahdi Tajeddin

Dr. Mahdi Tajeddin is an assistant professor of Entrepreneurship and Strategy, at Sobey School of Business, Saint Mary’s University, Canada. He has been studying the internationalization process of firms in emerging economies contexts, particularly Sub-Saharan Africa. His papers have been placed in peer-reviewed journals such as Entrepreneurship Theory and Practice and recognized international conferences, including AOM, AIB, and EGOS.

Amon Simba

Dr. Amon Simba is an established research and teaching scholar at Nottingham Business School (NBS) in the UK, and his expertise lies in entrepreneurship, innovation and strategy. He is an Associate Editor for the International Journal of Entrepreneurship and Small Business and Journal of Small Business & Entrepreneurship (JSBE). He is also an Research Grants Board Member for the Economic and Social Research Council (ESRC). He has published his work in leading journals including Journal of Business Research, Journal of Small Business Management, International Marketing Review and International Journal of Entrepreneurial Behaviour Research.