Cultural Biases in Economic Exchange?
Luigi Guiso,
Paola Sapienza and
Luigi Zingales
The Quarterly Journal of Economics, 2009, vol. 124, issue 3, 1095-1131
Abstract:
How much do cultural biases affect economic exchange? We answer this question by using data on bilateral trust between European countries. We document that this trust is affected not only by the characteristics of the country being trusted, but also by cultural aspects of the match between trusting country and trusted country, such as their history of conflicts and their religious, genetic, and somatic similarities. We then find that lower bilateral trust leads to less trade between two countries, less portfolio investment, and less direct investment, even after controlling for the characteristics of the two countries. This effect is stronger for goods that are more trust intensive. Our results suggest that perceptions rooted in culture are important (and generally omitted) determinants of economic exchange.
Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (1089)
Downloads: (external link)
http://hdl.handle.net/10.1162/qjec.2009.124.3.1095 (application/pdf)
Access to full text is restricted to subscribers.
Related works:
Working Paper: Cultural Biases in Economic Exchange? (2007) 
Working Paper: Cultural Biases in Economic Exchange (2005) 
Working Paper: Cultural Biases in Economic Exchange (2005) 
Working Paper: Cultural Biases in Economic Exchange (2004) 
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:oup:qjecon:v:124:y:2009:i:3:p:1095-1131.
Ordering information: This journal article can be ordered from
https://academic.oup.com/journals
Access Statistics for this article
The Quarterly Journal of Economics is currently edited by Robert J. Barro, Lawrence F. Katz, Nathan Nunn, Andrei Shleifer and Stefanie Stantcheva
More articles in The Quarterly Journal of Economics from President and Fellows of Harvard College
Bibliographic data for series maintained by Oxford University Press ().