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The formal and informal institutional framework of capital accumulation

  • Pierre-Guillaume Méon
  • Khalid Sekkat

This paper studies the impact of social trust and formal legal and institutional determinants of capital accumulation in a panel of countries. It reports that formal determinants and trust interact, and that the two are substitutes. Specifically, the marginal impact of formal legal institutions decreases with trust, and vice versa. These findings apply both to total investment and to its foreign component, foreign direct investment.

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Paper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 13-036.

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Length: 35 p.
Date of creation: 07 Oct 2013
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Publication status: Published by:
Handle: RePEc:sol:wpaper:2013/149744
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