Cross-Border Entrepreneurship and Economic Development in Europe’s Border Regions

Cross-Border Entrepreneurship and Economic Development in Europe’s Border Regions

Edited by David Smallbone, Friederike Welter and Mirela Xheneti

This topical study focuses on entrepreneurship and economic development in Europe’s border regions. It highlights the effects of EU enlargement in these regions – both within the EU and in neighbouring countries – paying particular attention to cross-border entrepreneurial activity.

Chapter 3: Trust, learning and cross-border entrepreneurship

Friederike Welter, Nadezhda Alex and Susanne Kolb

Subjects: business and management, entrepreneurship


In recent years, there has been a growth of interest in the role of trust in business behaviour, because of its potential influence on reducing transaction costs (for example, Fukuyama, 1995; Williamson, 1993; Höhmann and Welter, 2005; Welter and Smallbone, 2006). Related to business behaviour, trust is based on a perception of the probability that other agents will behave in a way that is expected (Gambetta, 1988). In a cross-border context, trust might be expected to play a particularly important role because of the risks inherent in cross border transactions. For example, implementation gaps in the legal framework leave scope for discretionary actions of officials. In such a context, trust assists individuals in controlling these risks and reducing the costs connected with each border crossing. Also, trust and learning are closely linked, with recursive relations. Although learning happens independently of trust, it also can be an outcome of trust and its context, and it influences trust-building. Overall, the topic of trust and learning in relation to cross-border entrepreneurship has not been researched systematically, with most of the literature focusing on (inter)organizational and personal trust in the context of multinationals, but neglecting the regional component of international entrepreneurship.1 As such, a conceptual and empirical investigation of the topic can contribute to greater understanding of the role of different forms of trust on cross-border entrepreneurial activities.

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