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.