Trust, Ethics, Stock Market, and Economic Growth

Adam Ng, Abbas Mirakhor and Mansor Ibrahim

Chapter Chapter 6 in Social Capital and Risk Sharing, 2015, pp 91-113 from Palgrave Macmillan

Abstract: Abstract By 2007, more than US$ 15 trillion was held by over 91 million individual investors in stocks and corporate bonds, either directly or through mutual and pension funds (Stout, 2010). These massive investments and financial markets could not have conceivably reached such a size had it not been for most people having trust in their investments and the common belief in others’ trustworthiness (Guiso et al., 2008). However, scandals associated with the 2007/2008 financial crisis have eroded trust in the financial system. As a result, the need to understand forces contributing to financial market development and instability has been placed at the center stage of global policy and academic discussions. A sound and stable financial system underpinned by strong institutional quality and social capital has become an object of search.

Keywords: Social Capital; Stock Market; Total Factor Productivity; Financial Development; Legal Origin (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:pal:psibcp:978-1-137-47605-0_6

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DOI: 10.1057/9781137476050_6

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