The role of interpersonal trust for entrepreneurial exchange in a transition economy
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.
Keywords
Citation
Manolova, T.S., Gyoshev, B.S. and Manev, I.M. (2007), "The role of interpersonal trust for entrepreneurial exchange in a transition economy", International Journal of Emerging Markets, Vol. 2 No. 2, pp. 107-122. https://doi.org/10.1108/17468800710739207
Publisher
:Emerald Group Publishing Limited
Copyright © 2007, Emerald Group Publishing Limited