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Trust and Growth Revisited

Author

Listed:
  • Simplice Asongu

    (Graduate School of Business, University of Cape Town, Cape Town, South Africa)

  • Oasis Kodila-tedika

    (University of Kinshasa)

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.

Suggested Citation

  • Simplice Asongu & Oasis Kodila-tedika, 2017. "Trust and Growth Revisited," Economics Bulletin, AccessEcon, vol. 37(4), pages 2951-2961.
    • Handle: RePEc:ebl:ecbull:eb-17-00738
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    References listed on IDEAS

    as
    1. Oasis Kodila-Tedika & Julius Agbor, 2016. "Does Trust Matter for Entrepreneurship: Evidence from a Cross-Section of Countries," Economies, MDPI, vol. 4(1), pages 1-17, March.
    2. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    3. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 811-846.
      • Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
    4. Niclas Berggren & Mikael Elinder & Henrik Jordahl, 2008. "Trust and growth: a shaky relationship," Empirical Economics, Springer, vol. 35(2), pages 251-274, September.
    5. La Porta, Rafael, et al, 1997. "Trust in Large Organizations," American Economic Review, American Economic Association, vol. 87(2), pages 333-338, May.
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    7. Simplice A. Asongu, 2013. "Fighting corruption in Africa: do existing corruption‐control levels matter?," International Journal of Development Issues, Emerald Group Publishing Limited, vol. 12(1), pages 36-52, April.
    8. Yann Algan & Pierre Cahuc, 2010. "Inherited Trust and Growth," American Economic Review, American Economic Association, vol. 100(5), pages 2060-2092, December.
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    19. repec:hal:spmain:info:hdl:2441/432sbils8u9t7qa99cii5psht1 is not listed on IDEAS
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    More about this item

    Keywords

    Trust; Growth; Conditional Effects;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • Z1 - Other Special Topics - - Cultural Economics

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