Munich Personal RePEc Archive

Trust and Prosperity: A Conditional Relationship

Asongu, Simplice A. and Kodila-Tedika, Oasis (2013): Trust and Prosperity: A Conditional Relationship.

[img]
Preview
PDF
MPRA_paper_46865.pdf

Download (312kB) | Preview

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.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.