How do informal ties contribute to the development of trust within an entrepreneurial network?
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Informal ties within entrepreneurial networks play a crucial role in fostering trust among members. These ties are based on trust relationships and are utilized to gain a competitive advantage in business. The selection of ties for funding is influenced by cultural dimensions, where traditional cultures tend to support funding for family and relatives, while modern cultures lean towards financing strangers with promising business ideas. Social trust acts as a significant determinant in the formation of new firms, facilitating information flow and knowledge exchange within relational structures. In contexts with weak formal institutions, entrepreneurs rely on indigenous institutions and personal trust to develop parallel institutional trust, enabling business transactions in regions with limited institutional support.
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| Papers (5) | Insight |
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01 Jan 2019 1 Citations | Informal ties, such as cultural norms and indigenous institutions, enable entrepreneurs to develop trust within entrepreneurial networks by enforcing oral contracts and maintaining social relationships, fostering trust and cooperation. |
11 Citations | Informal ties within entrepreneurial networks act as informal institutions, aiding in trust-building among local entrepreneurs by compensating for the deficiencies of formal institutions in transitional economies. |
| Informal ties within an entrepreneurial network enhance trust by facilitating information exchange and knowledge sharing, fostering new firm formation in regions with varying levels of economic development and governance quality. | |
| Informal ties, influenced by traditional or modern culture, impact trust development in entrepreneurial networks. Traditional culture favors family ties, while modern culture supports funding strangers with promising ideas. | |
3 Citations | Informal ties in Southeast Europe's entrepreneurial networks are based on trust, offering competitive advantages. However, they come with costs, both monetary and non-monetary, impacting entrepreneurs' perceptions and behaviors. |
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