Social capital and trust: the ‘fuel’ of local integration of small rural enterprises

Tomay, Kyra and Hegedüs, Márk (2023) Social capital and trust: the ‘fuel’ of local integration of small rural enterprises. INTERSECTIONS: EAST EUROPEAN JOURNAL OF SOCIETY AND POLITICS, 9 (4). pp. 123-140. ISSN 2416-089X

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Abstract

In the present article we examine a sub-segment of the ‘locally integrated social group’: rural and small-town entrepreneurs. Entrepreneurs are especially interesting from the integration point of view since, in the current academic discourse, entrepreneurship is considered a contextual process in which the former depend on local information and resources and base their activities on the needs of the local environment. Accordingly, rural and small-town entrepreneurs are commonly studied through the concepts of local embeddedness, social capital, and trust. The aim of our paper is to contribute to the understanding of those mechanisms: the impact of trust among entrepreneurs and their social networks that result in the local integration of this rural group. The study, based on 25 semi-structured in-depth interviews, focuses on the role of values, attitudes, social capital, and trust networks in local economic success in three Hungarian settlements of different sizes: a small village of 300, a small town of 3,000 and a medium-sized town of 30,000 inhabitants. Our conclusion is that in the case of rural and small-town entrepreneurship, community resources (values, attitudes, social capital, and trust) play a chief role in the foundation and existence of a local entrepreneurial ecosystem. However, their efforts must be accompanied by an institutional framework to make them sustainable in the long term.

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