Social capital and trust: The ‘fuel’ of local integration of rural and small-town enterprises

Abstract

In the present article we examine a sub-segment of the locally integrated social group: rural small entrepreneurs. Entrepreneurs are especially interesting from the integration point of view since in the current academic discourse, entrepreneurship is considered as a contextual process, in which entrepreneurs depend on local information and resources, and base their activities on the needs of the local environment, therefore, rural entrepreneurs are commonly studied through the concepts of local embeddedness, social capital and trust. The aim of our paper is to contribute to the understanding of the those mechanisms: the impact of trust among entrepreneurs and their social networks resulting the local integration of this rural group. The study based on 25 semi-structured in-depth interviews, focuses on the role of values, attitudes, social capital and trust networks in local economic success in three Hungarian settlements of different size: a small village of 300, a small town of 3,000 and a medium-sized town of 30,000 inhabitants. Our conclusion is that in case of rural small entrepreneurship, community resources (values, attitudes, social capital and trust) are of chief role in the foundation and existence of a local entrepreneurial ecosystem, however, their efforts have to be accompanied by an institutional framework to make them sustainable in the long term.