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Trust and Specialization: Evidence from U.S. States

Author

Listed:
  • José De Sousa
  • Amélie Guillin
  • Julie Lochard
  • Arthur Silve

Abstract

Is culture a determinant of a jurisdiction’s comparative advantage? U.S. states that display a high level of generalized trust specialize in more “complex” industries that use contracts more intensively in their input-output relationships. This pattern is not driven by differences in states’ other observable characteristics or by unobservable time-varying industry- or state-specific factors, and it does not reflect selection by export destination. Theoretical considerations suggest that trust may be endogenous to the location of complex industries. An instrumental variable strategy that leverages the contemporary trust impact of historical racial discrimination confirms that trust factors into the comparative advantage of U.S. states.

Suggested Citation

  • José De Sousa & Amélie Guillin & Julie Lochard & Arthur Silve, 2020. "Trust and Specialization: Evidence from U.S. States," Cahiers de recherche 2010, Centre de recherche sur les risques, les enjeux économiques, et les politiques publiques.
    • Handle: RePEc:lvl:crrecr:2010
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    : Trust; Complexity; Comparative Advantage; Specialization;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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