Public Trust in Business and Its Determinants

Abstract

Public trust in business, or the degree to which external stakeholders such as the public trust business in general is largely understudied. As the relevance of public trust in business becomes ever more obvious to practitioners and scholars, the levels of trust in business have reached alarmingly low levels. On the one hand, political, economic, societal and technical developments lead to more need for public trust in business, on the other hand organizations, especially corporations, are arguably further eroding public trust. Hence, a trust gap is emerging which is likely to impair successful business development. Therefore business executives and scholars have become interested in how organizations can reestablish and maintain public trust to remain legitimate and secure long-term survival. Before scholars and practitioners can answer this important question, we must better understand the concept of public trust. This paper suggests four domains of existing trust research that scholars of public trust in business can draw from. Then we propose several hypotheses which aim to predict the determinants of public trust and test these hypotheses using a factorial vignette methodology. These results provide scholars with more direction as this is, to our knowledge, the first empirical study of public trust. Furthermore the study will enable those companies interested in increasing public trust to better understand respective determinants of public trust.

Keywords: Public Trust, Trust in Business, Stakeholder Trust, Reputation

JEL Classification: M1, M10, M14