Tuesday, November 19, 2013

The Daily Stat: Countries Full of Mistrustful People Are Less Entrepreneurial

  Daily Stat - Harvard Business Review

November 19, 2013

Countries Full of Mistrustful People Are Less Entrepreneurial


Interpersonal trust has a substantial impact on a country's level of entrepreneurship and, therefore, economic growth, according to an analysis of survey data from thousands of respondents by Byung-Yeon Kim of Seoul National University and Youngho Kang of Samsung Economic Research Institute, both in South Korea. For example, a 1-standard-deviation, or 16.4%, increase in a population's trust in strangers would increase the proportion of entrepreneurs in the workforce by 34.8%. High levels of interpersonal trust within a population reduce the uncertainties associated with engaging in entrepreneurial business activities.

SOURCE: Social Capital and Entrepreneurial Activity: A Pseudo-panel Approach


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