Trust and Market Institutions in Africa: Exploring the Role of Trust-Building in African Entrepreneurship

This book explores the importance of trust building in entrepreneurship, particularly in informal economies where formal legal arrangements are lacking. Taking the case of Africa, and Nigeria in particular, the author explores the alternative institutions that specify and define the rules of entrepreneurship, thereby allowing business to thrive. Importantly, the author presents distinct evidence of institutional rivalry within Africa, where competing institutions co-exist by acting in parallel, thus leading to the emergence of dominant hybrid institutional forms. As a consequence, the book takes an exploratory approach which advances theory on the role of trust in indigenous institutions.

Based on an investigation of thirty-six exporting SME owner-managers, the book focuses on multiple case studies and provides insights on how alternative indigenous arrangements are sufficient in enforcing credible commitments to exporting agreements. Ultimately, the author argues that trust is essential in promoting entrepreneurial relationships in Africa and in Nigeria in particular. It shows how Nigerian entrepreneurs have been able to respond and adapt to the specific socio-economic challenges of their environment and raises raise questions about the role of alternative indigenous institutions. Furthermore, the research in this book makes an important contribution to entrepreneurial behavior in emerging markets.