Firm-level trust in emerging markets: the moderating effect on the institutional strength- corruption relationship in Mexico and Peru
DOI:
https://doi.org/10.18046/j.estger.2018.147.2656Keywords:
Corruption, trust, institutions, resource-based viewAbstract
Emerging market firms often face corruption and institutional weakness in their environments. Firm-level trust may help with these challenges. In these countries, firm-level trust may engage employees and reduce pressure on firms from weak institutions and corruption. This is a study of employees of firms in Mexico and Peru, and it measures perceptions of corruption, trust, and institutional strength. Using confirmatory factor analysis and linear regression, the study tests hypotheses that trust moderates the weak institution - perceived corruption relationship. Findings suggest that trust may help employees be productive despite these challenges. Firms that build trust among employees may be better able to confront the challenges of corrupt and uncertain institutional environments.
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