TRUST,TRUSTWORTHINESS, AND BUSINESS SUCCESS: LAB AND FIELD FINDINGS FROM ENTREPRENEURS

This article contributes to the literature on trust and small businesses in developing countries by linking the level of trust in others that entrepreneurs display in a lab setting to sales data outside of the lab. The results show a robust positive correlation between trust and business success (with sales used as a measure of success): The successful entrepreneurs invested in trust more than the less successful ones did. In the lab, trusting in others is highly profitable, with successful entrepreneurs doing so to the degree required to maximize revenue. However, I found no association between trustworthiness and business success. (JEL O17, L26, C91)