Trust Environments and Entrepreneurial Behavior – Exploratory Evidence From Estonia, Germany and Russia

Abstract

This paper explores the role of different trust environments in West and East Europe on the behavior of entrepreneurs. In a stable institutional environment (e.g., Germany, core regions in Russia) personal trust mainly plays a complementary role for entrepreneurial behavior, while in more fragile environments (e.g., peripheral regions in Russia) it can substitute for institutional deficiencies. The exploratory empirical data analyzed in this study comprise three countries (Estonia, Germany and Russia), and they stem from an international research project, which was supported by the Volkswagen Foundation. The empirical discussion focuses in particular on interfirm relations of small businesses as well as on the sources of assistance used by entrepreneurs in solving business problems. The preliminary results indicate that the forms of trust depend on the respective regional and sectoral environments, which draws attention to the difficulties of classifying whole countries as "high-trust" versus "low-trust". Limitations of the analysis refer to the cross-sectional nature of the survey data.

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