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Trust, Market Participation and Economic Outcomes: Evidence from Rural China

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  • Tu, Qin
  • Bulte, Erwin

Abstract

Summary Markets can only function properly in the presence of sufficient trust. We explore the relation between trusting behavior and market integration in rural China. We link the results of a trust experiment to actual behavior in the field (participation in the labor market versus informally exchanging labor), and find that high-trust households are more likely to use formal markets. We proceed by exploring the relation between labor market participation and economic outcomes, finding tentative evidence of a causal relation running from market participation to higher levels of income.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 38 (2010)
Issue (Month): 8 (August)
Pages: 1179-1190

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Handle: RePEc:eee:wdevel:v:38:y:2010:i:8:p:1179-1190

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Web page: http://www.elsevier.com/locate/worlddev

Related research

Keywords: trust game economic behavior labor exchange labor market participation;

References

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Citations

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Cited by:
  1. Zhang, Lei & Zhu, Xueqin & Heerink, Nico & Shi, Xiaoping, 2014. "Does output market development affect irrigation water institutions? Insights from a case study in northern China," Agricultural Water Management, Elsevier, vol. 131(C), pages 70-78.
  2. Siziba, Shephard & Bulte, Erwin, 2012. "Does market participation promote generalized trust? Experimental evidence from Southern Africa," Economics Letters, Elsevier, vol. 117(1), pages 156-160.
  3. Nee, Victor & Opper, Sonja & Holm, Hakan J., 2014. "Social Exchange and Generalized Trust in China," Working Papers, Lund University, Department of Economics 2014:30, Lund University, Department of Economics.

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