Trust and Prosperity: A Conditional Relationship

Simplice Asongu and Oasis Kodila-Tedika

MPRA Paper from University Library of Munich, Germany

Abstract: The paper extends Breggren et al. (2008, EE) on ‘trust and growth: a shaky relationship” by incorporating recent developments in the trust-growth literature and using a robust methodological underpinning that accounts for the presence of outliers. The empirical evidence is based on 63 countries. Two main findings are established. Firstly, the substantially documented positive trust-growth nexus is broadly confirmed. Secondly, when initial levels of growth come into play in determining the relationship, only 0.25 and 0.90 quantiles confirm the positive nexus. The results suggest that the trust-growth nexus cannot be generalized for all countries as some previous studies have concluded. Accordingly, blanket trust-growth policies may not succeed unless they are contingent on existing levels of development and tailored differently across rich and poor countries.

Keywords: Trust; Growth; Conditional Effects (search for similar items in EconPapers)
JEL-codes: A13 O40 Z13 (search for similar items in EconPapers)
Date: 2013-05-07, Revised 2013-06-15
New Economics Papers: this item is included in nep-evo, nep-fdg and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Trust and Prosperity: A Conditional Relationship (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:46865

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