IDEAS home Printed from
   My bibliography  Save this article

Trust and economic growth in a democratic power shift: an empirical study of Taiwan


  • Fen-May Liou
  • Cherng G. Ding


Purpose - This study aims to explore the impact of the movement from “authoritarian democracy” to full democracy on the relationships between trust with economic growth and investment. Design/methodology/approach - Simple regression models were applied to Taiwan as a case study. Findings - Results indicate that: the direct effect of social trust on growth was significant regardless of the democratic power changeover; the indirect effect through fixed investment was significant only after the transfer of political power; and the direct effect of political trust on growth and the indirect effect through fixed investment were both significant only after the transfer of political power. Research limitations/implications - The time span of the data used for the regression models in this paper is only ten years, which constrains the number of control variables used in the model. Practical implications - This study indicates that the political regime plays as a contingency to the essay of social capital and economic growth. Originality/value - This paper first provides a detailed investigation to specify the effects of social trust on economic growth during the first democratic power changeover.

Suggested Citation

  • Fen-May Liou & Cherng G. Ding, 2007. "Trust and economic growth in a democratic power shift: an empirical study of Taiwan," International Journal of Development Issues, Emerald Group Publishing, vol. 6(1), pages 63-78, February.
  • Handle: RePEc:eme:ijdipp:v:6:y:2007:i:1:p:63-78

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Kremer, Michael R., 1998. "Patent Buyouts: A Mechanism for Encouraging Innovation," Scholarly Articles 3693705, Harvard University Department of Economics.
    2. Marin C. Gemmill & Joan Costa-Font & Alistair McGuire, 2007. "In search of a corrected prescription drug Elasticity estimate: a meta-regression approach," Health Economics, John Wiley & Sons, Ltd., vol. 16(6), pages 627-643.
    3. Michael Kremer, 1998. "Patent Buyouts: A Mechanism for Encouraging Innovation," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1137-1167.
    4. DiMasi, Joseph A. & Hansen, Ronald W. & Grabowski, Henry G., 2003. "The price of innovation: new estimates of drug development costs," Journal of Health Economics, Elsevier, vol. 22(2), pages 151-185, March.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Trust; Economic growth; Taiwan;


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:ijdipp:v:6:y:2007:i:1:p:63-78. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.