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Does Country Level Social Trust Predict the Size of the Sharing Economy?

Author

Listed:
  • Bergh, Andreas

    () (Research Institute of Industrial Economics (IFN))

  • Funcke, Alexander

    (Philosophy, Politics & Economics)

Abstract

The sharing economy (peer-to-peer based sharing or renting activities coordinated through community-based online services) is typically assumed to be closely related to social trust. The two sharing economy companies Airbnb and Flipkey exist in over 100 countries, allowing us to construct a measure of sharing economy penetration to test against social trust and other potential explanations. Results indicate that sharing economy penetration is promoted by ICT-infrastructure and economic openness, whereas the correlation with social trust is negative and often statistically significant. Our conclusion is that sharing economy services do not require high levels of social trust to succeed. Rather, they provide institutions that facilitate trust-intensive economic activities also where social trust is low.

Suggested Citation

  • Bergh, Andreas & Funcke, Alexander, 2016. "Does Country Level Social Trust Predict the Size of the Sharing Economy?," Working Paper Series 1130, Research Institute of Industrial Economics.
  • Handle: RePEc:hhs:iuiwop:1130
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    References listed on IDEAS

    as
    1. Horton, John J. & Zeckhauser, Richard J., 2016. "Owning, Using and Renting: Some Simple Economics of the "Sharing Economy"," Working Paper Series 16-007, Harvard University, John F. Kennedy School of Government.
    2. Gordon Tullock, 1985. "Adam Smith and the Prisoners' Dilemma," The Quarterly Journal of Economics, Oxford University Press, vol. 100(Supplemen), pages 1073-1081.
    3. Berggren, Niclas & Bjørnskov, Christian, 2011. "Is the importance of religion in daily life related to social trust? Cross-country and cross-state comparisons," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 459-480.
    4. Yann Algan & Pierre Cahuc, 2010. "Inherited Trust and Growth," American Economic Review, American Economic Association, vol. 100(5), pages 2060-2092, December.
    5. Andreas Bergh & Christian Bjørnskov, 2011. "Historical Trust Levels Predict the Current Size of the Welfare State," Kyklos, Wiley Blackwell, vol. 64(1), pages 1-19, February.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Sharing economy; Trust; Information technology;

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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