Trust and Growth Revisited

Asongu, Simplice and Kodila-Tedika, Oasis (2017): Trust and Growth Revisited. Published in: Economics Bulletin , Vol. 37, No. 4 (29 December 2017): pp. 2951-2961.

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. First, the substantially documented positive trust-growth nexus is broadly confirmed. Second, when initial levels of growth come into play in determining the relationship, only the 25th quartile and 90th decile 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, trust-growth policies should be contingent on existing levels of development and tailored differently across rich and poor countries.

• Item Type: MPRA Paper
• Language: English
• Keywords: Trust; Growth; Conditional Effects
• Subjects: A - General Economics and Teaching > A1 - General Economics > A13 - Relation of Economics to Social Values; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z13 - Economic Sociology ; Economic Anthropology ; Social and Economic Stratification

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