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The role of interpersonal trust for entrepreneurial exchange in a transition economy

The role of interpersonal trust for entrepreneurial exchange in a transition economy Purpose – While trust is widely recognized as central to the establishment of an effective market economy, research on transition economies has not examined sufficiently its role in promulgating economic development. This study seeks to ascertain the links between supplier trust, asset specificity, and uncertainty reduction in the context of a transition economy, and to validate a measure of trust developed in a Western developed market economy in the conditions of a transition economy. Design/methodology/approach – A confirmatory factor analysis of trust, asset specificity and uncertainty reduction was performed with a sample of Bulgarian small business owners. Findings – Commensurate with expectations, supplier trust is significantly and positively associated with both asset specificity and uncertainty reduction. The six‐item measure of supplier trust is a valid measure for new and small ventures in the context of a transition economy. Originality/value – This paper demonstrates that private entrepreneurs in transition economies compensate for the lack of institutional support through embeddedness in their relational exchange network. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Emerging Markets Emerald Publishing

The role of interpersonal trust for entrepreneurial exchange in a transition economy

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References (85)

Publisher
Emerald Publishing
Copyright
Copyright © 2007 Emerald Group Publishing Limited. All rights reserved.
ISSN
1746-8809
DOI
10.1108/17468800710739207
Publisher site
See Article on Publisher Site

Abstract

Purpose – While trust is widely recognized as central to the establishment of an effective market economy, research on transition economies has not examined sufficiently its role in promulgating economic development. This study seeks to ascertain the links between supplier trust, asset specificity, and uncertainty reduction in the context of a transition economy, and to validate a measure of trust developed in a Western developed market economy in the conditions of a transition economy. Design/methodology/approach – A confirmatory factor analysis of trust, asset specificity and uncertainty reduction was performed with a sample of Bulgarian small business owners. Findings – Commensurate with expectations, supplier trust is significantly and positively associated with both asset specificity and uncertainty reduction. The six‐item measure of supplier trust is a valid measure for new and small ventures in the context of a transition economy. Originality/value – This paper demonstrates that private entrepreneurs in transition economies compensate for the lack of institutional support through embeddedness in their relational exchange network.

Journal

International Journal of Emerging Markets – Emerald Publishing

Published: Apr 17, 2007

Keywords: Trust; Assets management; Uncertainty management

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