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Trust and Innovation in Europe: Causal, spatial and non-linear forces

  • Semih Akçomak


    (TEKPOL, Science and Technology Policy Studies, Middle East Technical University)

  • Hanna Müller-Zick


    (Maastricht University)

This paper investigates the effect of trust on innovation. In addition to generalised trust we use a range of other indicators that could measure trust and investigate which trust related variables could explain innovation in 20 European countries divided into 135 regions. We specifically look at causal, non-linear and spatial forces. Our findings indicate that only generalised trust and non-egoistic fairness have robust effects on innovation in Europe. Using historical data on the extent and existence of universities and an instrumental variable strategy we set up a causal relationship between trust and innovation. Even after controlling for causal, spatial and non-linear forces there is a significant direct impact of trust on innovation.

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Paper provided by STPS - Science and Technology Policy Studies Center, Middle East Technical University in its series STPS Working Papers with number 1304.

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Length: 43 pages
Date of creation: Dec 2013
Date of revision: Dec 2013
Handle: RePEc:met:stpswp:1304
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  1. Bottazzi, Laura & Peri, Giovanni, 2003. "Innovation and spillovers in regions: Evidence from European patent data," European Economic Review, Elsevier, vol. 47(4), pages 687-710, August.
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  4. Akcomak, Semih & Ter Weel, Bas, 2007. "How do social capital and government support affect innovation and growth? Evidence from the EU regional support programmes," MERIT Working Papers 009, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  5. Sriya Iyer & Michael Kitson & Bernard Toh, 2005. "Social capital, economic growth and regional development," Regional Studies, Taylor & Francis Journals, vol. 39(8), pages 1015-1040.
  6. Danielson, Anders & Holm, Hakan J, 2003. "Tropic Trust versus Nordic Trust: Experimental Evidence from Tanzania and Sweden," Working Papers 2003:6, Lund University, Department of Economics.
  7. Angelo Antoci & Fabio Sabatini & Mauro Sodini, 2010. "The Solaria Syndrome: Social Capital in a Growing Hyper-technological Economy," Working Papers 2010.100, Fondazione Eni Enrico Mattei.
  8. Carmen Echebarria & Jose M. Barrutia, 2013. "Limits of Social Capital as a Driver of Innovation: An Empirical Analysis in the Context of European Regions," Regional Studies, Taylor & Francis Journals, vol. 47(7), pages 1001-1017, July.
  9. Sjoerd Beugelsdijk & Ton Van Schaik, 2005. "Differences in social capital between 54 Western European regions," Regional Studies, Taylor & Francis Journals, vol. 39(8), pages 1053-1064.
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  15. Anneli Kaasa, 2007. "Effects Of Different Dimensions Of Social Capital On Innovation: Evidence From Europe At The Regional Level," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 51, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  16. Ernest Miguelez & Rosina Moreno & Manuel Artis, 2011. "Does Social Capital Reinforce Technological Inputs in the Creation of Knowledge? Evidence from the Spanish Regions," Regional Studies, Taylor & Francis Journals, vol. 45(8), pages 1019-1038.
  17. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
  18. Ahlerup, Pelle & Olsson, Ola & Yanagizawa, David, 2007. "Social Capital vs Institutions in the Growth Process," Working Papers in Economics 248, University of Gothenburg, Department of Economics.
  19. Juan Alcácer & Wilbur Chung, 2007. "Location Strategies and Knowledge Spillovers," Management Science, INFORMS, vol. 53(5), pages 760-776, May.
  20. Steven N. Durlauf, 2002. "On the Empirics of Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 459-479, November.
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