Trust in Transition: Cross-Country and Firm Evidence
Using data from a large survey of firms across 26 transition economies, this article assesses the extent of trust in business relationships by measuring the level of prepayment demanded by suppliers, which we interpret as a measure of (dis)trust. We investigate a range of potential determinants of trust and find that trust among businesses is higher where confidence in third party enforcement through the legal system is higher. We also find that different types of business networks have a differential impact on the degree of trust between enterprises: networks based around family and friends help to build trust among firms, whereas networks based around enterprise insiders and government agencies appear to undermine trust. Our conclusion, based on the use of a unique multicountry enterprise data set, is that enterprises' room for maneuver in overcoming opportunism and distrust is much more limited by countrywide systemic factors than previously believed.
| Main Authors: | , , , |
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| Format: | Journal Article biblioteca |
| Language: | EN |
| Published: |
2008
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| Subjects: | Firm Performance: Size, Diversification, and Scope L250, Socialist Enterprises and Their Transitions P310, Economic Sociology, Economic Anthropology, Social and Economic Stratification Z130, |
| Online Access: | http://hdl.handle.net/10986/4857 |
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