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Social Capital, Trust and Entrepreneurial Productivity
Author(s) -
SalasFumás Vicente,
SanchezAsin J. Javier
Publication year - 2019
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/manc.12259
Subject(s) - social capital , productivity , panel data , economics , capital (architecture) , entrepreneurship , labour economics , power (physics) , delegation , demographic economics , microeconomics , econometrics , finance , economic growth , management , social science , physics , archaeology , quantum mechanics , sociology , history
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.