Trust, Market Participation and Economic Outcomes: Evidence from Rural China

Qin Tu and Erwin Bulte

World Development, 2010, vol. 38, issue 8, 1179-1190

Abstract: Summary Markets can only function properly in the presence of sufficient trust. We explore the relation between trusting behavior and market integration in rural China. We link the results of a trust experiment to actual behavior in the field (participation in the labor market versus informally exchanging labor), and find that high-trust households are more likely to use formal markets. We proceed by exploring the relation between labor market participation and economic outcomes, finding tentative evidence of a causal relation running from market participation to higher levels of income.

Keywords: trust; game; economic; behavior; labor; exchange; labor; market; participation (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (25)

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