Trust and firm performance: A bi-directional study

Qiao Xu, Guy D. Fernando and Kinsun Tam

Advances in accounting, 2019, vol. 47, issue C

Abstract: This paper investigates the relationship between firm performance and trust in the firm. We use a trust measure based on the count of trust words in the Management Discussion and Analysis section of 10-K filings. Our regression results indicate that the current level of trust is associated with improved future performance, while current level of performance is positively related to future improvement in trust. We discuss these results and their managerial, investment and research implications.

Keywords: Trust; Firm performance; MD&A (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:47:y:2019:i:c:s0882611018302268

DOI: 10.1016/j.adiac.2019.100433

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