Marketing Competence and Institutional Trust in Business

Abstract

Trust in institutions can have important benefits for a country’s overall well-being. However, research on the specific factors that engender institutional trust in business remains limited. To this end, the authors conduct two studies to examine the impact of marketing competence on institutional trust in business. First, they compile a data set of trust in business perceptions among the general public from 26 countries from 2011–2017. Drawing on institutional theory and the capabilities-based view, the authors examine the effect of country-level business competence in marketing on a country’s level of institutional trust in business. Country-level panel data analysis indicates that the level of marketing competence of a country's businesses positively impacts public trust in business in the country. Results also indicate that this effect strengthens when confidence in government is low. Second, an experiment explores the mediating pathways by which marketing competence fosters this effect on public trust in business. Together, these findings provide new insight into the concept of institutional trust in business and showcase the role of marketing in creating such trust.