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How Does Social Trust Affect Economic Growth?

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  • Bjørnskov, Christian

    ()
    (Department of Economics, Aarhus School of Business)

Abstract

This paper connects two strands of the literature on social trust by estimating the effects of trust on growth through a set of potential transmission mechanisms directly. It does so by modelling the process using a three-stage least squares estimator on a sample of countries for which a full data set is available. The results indicate that trust affects schooling and the rule of law directly. These variables in turn affect the investment rate (schooling) and provide a direct effect (rule of law) on the growth rate. The paper closes with a short discussion of the relevance of the findings.

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File URL: http://www.hha.dk/nat/wper/06-2_CB.pdf
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Bibliographic Info

Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 06-2.

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Length: 44 pages
Date of creation: 04 May 2006
Date of revision:
Handle: RePEc:hhs:aareco:2006_002

Contact details of provider:
Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx
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Keywords: Growth; Trust; Transmission mechanisms;

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References

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  1. Wacziarg, Romain, 2000. "Measuring the Dynamic Gains from Trade," Research Papers, Stanford University, Graduate School of Business 1654, Stanford University, Graduate School of Business.
  2. Temple, Jonathan R. W., 2001. "Generalizations that aren't? Evidence on education and growth," European Economic Review, Elsevier, Elsevier, vol. 45(4-6), pages 905-918, May.
  3. Weede, Erich & Kampf, Sebastian, 2002. "The Impact of Intelligence and Institutional Improvements on Economic Growth," Kyklos, Wiley Blackwell, Wiley Blackwell, vol. 55(3), pages 361-80.
  4. Greif, Avner, 1994. "On the Political Foundations of the Late Medieval Commercial Revolution: Genoa During the Twelfth and Thirteenth Centuries," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 54(02), pages 271-287, June.
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Cited by:
  1. Roman Horváth, 2012. "Does Trust Promote Growth?," Working Papers, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies) 319, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
  2. Afandi, Elvin & Kermani, Majid, 2012. "The Relationship between Trust and a Firm’s Access to Financing: Evidence from Transitional Countries," MPRA Paper 46998, University Library of Munich, Germany.
  3. Peiró Palomino Jesús & Tortosa-Ausina Emili, 2013. "Can Trust Effects on Development be Generalized? A Response by Quantile," Working Papers, Fundacion BBVA / BBVA Foundation 2013128, Fundacion BBVA / BBVA Foundation.
  4. Kim, Byung-Yeon & Kang, Youngho, 2014. "Social capital and entrepreneurial activity: A pseudo-panel approach," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 97(C), pages 47-60.
  5. Jesús Peiró-Palomino, 2013. "European regional convergence revisited: The role of space and the intangible assets," Working Papers, Economics Department, Universitat Jaume I, Castellón (Spain) 2013/11, Economics Department, Universitat Jaume I, Castellón (Spain).
  6. Hans Pitlik & Ludek Kouba, 2014. "Does social distrust always lead to a stronger support for government intervention?," WWWforEurope Policy Paper series 8, WWWforEurope.
  7. Thomas Farole & Andrés Rodríguez-Pose & Michael Storper, 2007. "Social capital, rules, and institutions: A cross-country investigation," Working Papers, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales 2007-12, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
  8. Tobias, Jutta M. & Mair, Johanna & Barbosa-Leiker, Celestina, 2013. "Toward a theory of transformative entrepreneuring: Poverty reduction and conflict resolution in Rwanda's entrepreneurial coffee sector," Journal of Business Venturing, Elsevier, vol. 28(6), pages 728-742.
  9. Jesús Peiró-Palomino & Anabel Forte Deltell, 2013. "Does social capital matter for European regional growth?," Working Papers, Economics Department, Universitat Jaume I, Castellón (Spain) 2013/02, Economics Department, Universitat Jaume I, Castellón (Spain).
  10. Hans Pitlik & Ludek Kouba, 2013. "The interrelation of informal institutions and governance quality in shaping Welfare State attitudes," WWWforEurope Working Papers series 38, WWWforEurope.
  11. Matear, Margaret & Dacin, Peter A., 2010. "Marketing and societal welfare: A multiple stakeholder approach," Journal of Business Research, Elsevier, Elsevier, vol. 63(11), pages 1173-1178, November.
  12. Fabio Sabatini, 2009. "The relationship between trust and networks. An exploratory empirical analysis," Economics Bulletin, AccessEcon, vol. 29(2), pages 661-672.
  13. Peter Huber & Thomas Leoni & Hans Pitlik, 2013. "Reforming Welfare States," WWWforEurope Deliverables series 1, WWWforEurope.

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