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    DOES TRUST PROMOTE ENTREPRENEURSHIP IN A DEVELOPING COUNTRY?

    Access Status
    Fulltext not available
    Authors
    Sohn, Kitae
    KWON, I.
    Date
    2016
    Type
    Journal Article
    
    Metadata
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    Citation
    Sohn, K. and KWON, I. 2016. DOES TRUST PROMOTE ENTREPRENEURSHIP IN A DEVELOPING COUNTRY?. Singapore Economic Review. 61 (2).
    Source Title
    Singapore Economic Review
    DOI
    10.1142/S0217590816500144
    ISSN
    0217-5908
    School
    Department of Economics & Property
    URI
    http://hdl.handle.net/20.500.11937/51730
    Collection
    • Curtin Research Publications
    Abstract

    © 2016 World Scientific Publishing CompanyTrust was found to promote entrepreneurship in the US. We investigated whether this was true in a developing country, Indonesia. We failed to replicate this; this failure was true whether trust was estimated at the individual or community level or whether ordinary least squares (OLS) or two stage least squares (2SLS) was employed. We reconciled the difference between our results and those for the US by arguing that the weak enforcement of property rights in developing countries and the consequent hold-up problem make it more efficient for entrepreneurs to produce generic goods than relationship-specific goods—producing generic goods does not depend on trust.

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