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Trust and Innovation in Europe: Causal, spatial and non-linear forces

Semih Akçomak and Hanna Müller-Zick ()
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Hanna Müller-Zick: Maastricht University

No 1304, STPS Working Papers from STPS - Science and Technology Policy Studies Center, Middle East Technical University

Abstract: This paper investigates the effect of trust on innovation. In addition to generalised trust we use a range of other indicators that could measure trust and investigate which trust related variables could explain innovation in 20 European countries divided into 135 regions. We specifically look at causal, non-linear and spatial forces. Our findings indicate that only generalised trust and non-egoistic fairness have robust effects on innovation in Europe. Using historical data on the extent and existence of universities and an instrumental variable strategy we set up a causal relationship between trust and innovation. Even after controlling for causal, spatial and non-linear forces there is a significant direct impact of trust on innovation.

Keywords: trust; social capital; innovation; EU (search for similar items in EconPapers)
Pages: 43 pages
Date: 2013-12, Revised 2013-12
New Economics Papers: this item is included in nep-cse, nep-eff, nep-eur, nep-geo, nep-gro, nep-ino, nep-soc, nep-tid and nep-ure
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http://stps.metu.edu.tr/sites/stps.metu.edu.tr/files/TEKPOL%20WP%201304.pdf First version, 2013 (application/pdf)
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Persistent link: https://EconPapers.repec.org/RePEc:met:stpswp:1304

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