Competition Builds Trust

Patrick Francois (), Thomas Fujiwara and Tanguy van Ypersele

Economics working papers from Vancouver School of Economics

Abstract: This paper shows that (firm-level) competition has a positive impact on (individual-level) trust. Using US states’ banking de-regulation from the mid 1970s, we first show that an increase in competition had a causal impact on trust, measured in the General Social Survey (GSS). We develop a model which explains why increased competition within a state increases trust. The model also predicts a positive correlation between trust and sectoral competitiveness in the cross-section. We explore this implication using the 2004 wave of the GSS which we match with US census of firms competition measures. The model’s predictions are strongly borne out.

Keywords: Trust (search for similar items in EconPapers)
Pages: 38 pages
Date: 2009-12-02, Revised 2009-12-02
New Economics Papers: this item is included in nep-bec and nep-soc
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.econ.ubc.ca/fpatrick/COMPET_TRUST_NOV18FINAL.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ubc:bricol:patrick_francois-2009-65

Access Statistics for this paper

More papers in Economics working papers from Vancouver School of Economics
Bibliographic data for series maintained by Maureen Chin ().