Social Capital, Trust and Entrepreneurial Productivity

With an incomplete panel data from 63 countries over 25 years this paper finds that the average number of employees per entrepreneur increases with the countries' levels of social capital. This evidence is in line with predictions from occupational choice models, where the equilibrium average s...

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Bibliographic Details
Published inThe Manchester school Vol. 87; no. 5; pp. 607 - 639
Main Authors Salas‐Fumás, Vicente, Sanchez‐Asin, J. Javier
Format Journal Article
LanguageEnglish
Published Manchester Blackwell Publishing Ltd 01.09.2019
Subjects
Decision making models
Delegation
Entrepreneurs
Occupational choice
Panel data
Power
Productivity
Social capital
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Summary:With an incomplete panel data from 63 countries over 25 years this paper finds that the average number of employees per entrepreneur increases with the countries' levels of social capital. This evidence is in line with predictions from occupational choice models, where the equilibrium average size of firms increases with lower internal costs of growth, when social capital supported trust reduces these costs facilitating the delegation of decision power in firms. We also find that the influence of social capital in self‐employed rates differs if the self‐employed have employees or not so entrepreneurs should be treated as a heterogeneous group.
ISSN:1463-6786
1467-9957
DOI:10.1111/manc.12259