article · Economies
This research investigates whether differences in trust levels between countries can explain variations in entrepreneurial spirit. The study tested this hypothesis using a cross-section of 60 countries in 2010. Findings indicate that approximately half of the observed variation in entrepreneurial spirit across these countries is attributable to trust considerations. This result was found to be robust, holding true even when accounting for regional clustering, outliers, and alternative conditioning variables. The research suggests that while formal incentives are important for fostering entrepreneurship, policymakers should also recognise and cultivate the role of trust, particularly that which is built through informal networks.
Understanding the role of trust in fostering entrepreneurship is crucial for economic development. This research highlights that social factors, not just economic policies, significantly influence a country's entrepreneurial activity, offering valuable insights for policymakers aiming to boost innovation and business creation.
The abstract does not indicate a direct commercialisation pathway for a product or service. Instead, it provides insights for policy formulation, suggesting that governments and development organisations could use these findings to design programmes that foster trust and informal networks to encourage entrepreneurship. This is early-stage research informing policy rather than a market-ready application.
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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.
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DOI: 10.3390/economies4010004
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