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Generalized trust and regional innovation activity

  • Schild, Christopher-Johannes

For a cross-section of 123 European regions, we find evidence for a positive effect of generalized trust on regional innovation activity. We aim to identify causal effects by using instrumental variables from climate and soil data, drawing from recent literature on the effects of climate on historic trust levels. The popular explanation for spatial clustering of innovation by interregional knowledge spillovers is also tested. It is found that spatial clustering of innovation activity can be better explained by a positive influence of trust on innovation and spatial clustering of trust.

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Paper provided by Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW) in its series IWQW Discussion Paper Series with number 02/2012.

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Date of creation: Aug 2013
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Handle: RePEc:zbw:iwqwdp:022012
Contact details of provider: Web page: http://www.iwqw.rw.uni-erlangen.de/

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  17. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
  18. Laura de Dominicis & Raymond J.G.M. Florax & Henri L.F. de Groot, 2013. "Regional clusters of innovative activity in Europe: are social capital and geographical proximity key determinants?," Applied Economics, Taylor & Francis Journals, vol. 45(17), pages 2325-2335, June.
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