Governance Trust as a Structural Driver of Sustainability Preparedness: A Comparative SEM Analysis in Emerging Market Financial Cooperatives

Institutional trust plays a critical role in shaping organizational responses to risk, particularly in emerging market financial systems. This study examines the psychosocial mechanisms through which institutional trust is associated with preparedness for social responsibility (SR) implementation in Ecuadorian savings and credit cooperatives. Using covariance-based structural equation modeling (CB-SEM) with 5000 bootstrap resamples (n = 2116), we assessed four competing structural models comparing direct, sequential, and parallel mediation pathways. The findings demonstrate that institutional trust has a significant direct impact on preparedness (β = 0.626, p < 0.001), accounting for 42.3% of its variance. The statistical rejection of full mediation models validates that readiness cannot be exclusively elucidated through cognitive or affective risk perception pathways. Notably, the study uncovers a “Trust Paradox”: contrary to the conventional “trust-as-control” heuristic, trust exhibited a significant positive correlation with both severity perception (β = 0.200, p < 0.001) and worry (β = 0.100, p < 0.001). This suggests that in high-reliability cooperative contexts, trust appears to function primarily as a validator of information credibility rather than a mitigator of threat magnitude. While the affective pathway was significant, its effect size was modest compared to the direct governance effect. These results indicate that preparedness for SR implementation in cooperative finance is driven more by governance legitimacy than by threat perception. The study enhances sustainability research by recognizing institutional trust as a fundamental structural driver of organizational resilience and vigilant preparedness in emerging market financial cooperatives.