Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/210921
Authors: 
Elert, Niklas
Stam, Erik
Stenkula, Mikael
Year of Publication: 
2019
Series/Report no.: 
IFN Working Paper 1280
Abstract: 
Trust and entrepreneurship are seen as key ingredients of long-term prosperity. However, it is not clear how these two are related. Part of the confusion can be traced back to the measurement of entrepreneurship, biased towards independent entrepreneurship (self-employed and new firms), and excluding entrepreneurship within established organizations. We shed new light on the relationship between trust and entrepreneurship, by proposing two mechanisms relating trust to entrepreneurship by employees, so-called intrapreneurship. We hypothesize that generalized trust influences the prevalence of intrapreneurship in an economy, and the allocation of entrepreneurial talents between independent entrepreneurship and intrapreneurship, through two mechanisms. First, generalized trust may substitute for complete contracts as a means of organizing labor in society, enabling a level of job autonomy in organizations necessary for intrapreneurship to flourish. Second, by way of its influence on the size and scope of the welfare state, generalized trust may increase the benefits of employment relative to self-employment, causing entrepreneurial individuals to elect to be intrapreneurs rather than independent entrepreneurs. Using a novel dataset, we find support for these hypotheses in a cross-country regression model covering the time period 2011-2017.
Subjects: 
Trust
Intrapreneurship
Entrepreneurship
Entrepreneurial behavior
Institutions
Job autonomy
Welfare state
JEL: 
H30
J20
J83
L26
M13
O12
O31
O43
O57
Document Type: 
Working Paper

Files in This Item:
File
Size
425.93 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.