Trust and development

Jacob Dearmon and Kevin Grier

Journal of Economic Behavior & Organization, 2009, vol. 71, issue 2, 210-220

Abstract: In this paper we examine linkages between social trust and economic development using, for the first time, a panel of data. We confirm earlier cross-sectional studies finding that trust is a significant factor in development and also show for the first time that trust significantly interacts with both investment in physical and human capital. We provide a robustness analysis of our results via a set of jackknife experiments on our main equations, and the trust coefficients and interactions are very tightly distributed, indicating that the results are not highly sample dependent. We also consider whether trust directly influences investment and find that in a panel framework it does not unless we allow for a trust-education interaction in the investment equation.

Keywords: Development; Economic; growth; Trust; Social; capital; Investment (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (109)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:71:y:2009:i:2:p:210-220

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