Management Review ›› 2020, Vol. 32 ›› Issue (9): 118-131.

• Technology and Innovation Management • Previous Articles     Next Articles

A Study on the Effect of Regional Trust Diversity on Individual Entrepreneurial Entry Decision——Empirical Evidences from 33 Countries

Song Yuanyang1, Zhao Jiaxin2   

  1. 1. School of Business, East China University of Science and Technology, Shanghai 200237;
    2. School of Business, Sun Yat-sen University, Guangzhou 510275
  • Received:2019-04-17 Online:2020-09-28 Published:2020-09-30

Abstract: Social trust of a region includes two core dimensions:trust level and trust diversity. Prior studies focused on the causes and consequences of regional trust level, while paid less attention to trust diversity. This study tries to reveal the effect of regional trust diversity on individual entrepreneurial entry to enrich and extend prior researches. Based on theoretical analysis and empirical tests of 107,107 observations of individual entrepreneurship from 33 countries, we find that:(1) regional trust diversity has an inverted U-shaped relationship with individual entrepreneurial entry, indicating that it is not conducive to entrepreneurship when regional trust diversity is too high or too low. (2) The higher the level of regional protection of property rights, the weaker the effect of trust diversity on individual entrepreneurial entry, indicating that individuals in areas with poor protection of property rights should pay more attention to the possible effect of trust diversity on entrepreneurship. (3) Individuals with rich entrepreneurial knowledge and skills are more able to adapt to and deal with the influence of external environment factors (e.g. social trust) on entrepreneurship, indicating that the effect of trust diversity on individual entrepreneurial entry will be weaker for individuals with rich entrepreneurial knowledge and skills. This study switches the research focus of social trust from trust level to trust diversity, which not only enriches and extends the research on social trust and entrepreneurship, but also generates practical implications for individuals to make better entrepreneurial decisions and government to improve the entrepreneurial environment.

Key words: social trust, trust diversity, entrepreneurial entry, protection of property rights, entrepreneurial knowledge and skills