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Repairing the Organizational Trust to Maintain and Enhance Deposits in Iran

Author

Listed:
  • Hedayati , Arshad

    () (Faculty of Management and Accounting, Allameh Tabataba'i University)

  • Rahman Sersht , Hossein

    () (Faculty of Management and Accounting, Allameh Tabataba'i University)

Abstract

Nowadays, the widespread connections among national and international organizations and industries make crisis in one area distress other organizations. One of the sensitive industries is banking industry, which has faced fundamental changes due to the various economic and political crisis in the last decade. Alterations such as exchange rates fluctuations, bankruptcy of unorganized institutions, economic sanctions and sanctions on banks cause crisis, which in turn result in the decrease in the public trust in banks, from both views of the depositors and stock investors. The present study, which is the first attempt in Iran, demonstrates approaches to the recreation and improvement of the trust in banking industry. To evaluate the hypothesis, a precise survey involving 455 banks customers, selected by random sampling method, was carried out in February 2018. According to the results, the trust in the government ownership have an important role in recreating of the trust in public sector banks. Besides, the role of state oversight and regulation extremely influences the recreation of the public trust in depositing in private sector banks. Most importantly, the trust in the government is significant on the increment of the trust in banking industry and the government ownership and regulation.

Suggested Citation

  • Hedayati , Arshad & Rahman Sersht , Hossein, 2017. "Repairing the Organizational Trust to Maintain and Enhance Deposits in Iran," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 12(4), pages 409-432, October.
  • Handle: RePEc:mbr:jmonec:v:12:y:2017:i:4:p:409-432
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    References listed on IDEAS

    as
    1. Alaka N Rao & Jone L Pearce & Katherine Xin, 2005. "Governments, reciprocal exchange and trust among business associates," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(1), pages 104-118, January.
    2. Bruce Kogut, 2002. "Capital market development and mass privatization are logical contradictions: lessons from Russia and the Czech Republic," Industrial and Corporate Change, Oxford University Press, vol. 11(1), pages 1-37, February.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Organizational Trust; Participation on Deposit Market; Deposit Market.;

    JEL classification:

    • E7 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G2 - Financial Economics - - Financial Institutions and Services

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