The Effects of Professional Managers' Credit on Their Work Performance: Firm Owners' Trust and Credit Identification Mechanisms

Finding successors for private enterprises has become an urgent problem in recent years, partially because those firms' owners lack trust in professional managers. Previous research on agents focuses on preventing opportunistic behavior and neglects the value of their entrepreneurship. In our research, professional managers' credit is divided into three dimensions: personal credit, professional credit and operational credit. Using a sample of 379 firm owners from 27 provinces in China, we find that credit and its detailed dimensions are positively related to private owners' trust in professional managers. We also found that a rigorous and effective credit identification mechanism positively moderate the above relationships. Furthermore, trust affects professional managers' work performance in a positive way. Accordingly, we advise that (1) professional managers' credit assessment system should be established and improved; (2) professional managers and enterprise owners should attach importance to enhancing professionalism and promoting rigorous credit identification mechanisms; (3) the closed-loop of the credit-trust psychologically interactive mechanism based on credit mechanisms and credit identification mechanisms should be put to use.