Post by Sapphire Capital on Sept 18, 2008 4:44:03 GMT 4
Corporate Stakeholders and Trust
Marc Goergen
University of Sheffield Management School; European Corporate Governance Institute (ECGI)
July 2008
ECGI - Finance Working Paper No. 213/2008
Abstract:
To our knowledge, this is the first paper that investigates the links between trust, the institutional setting (in terms of employment protection legislation (EPL) and investor rights) and studies the impact of all three on economic performance. In line with the previous literature (e.g. Knack and Keefer (1997), Zak and Knack (2001)), we find that trust has a positive impact on GDP per capita growth. Our novel results are twofold. First, we find that EPL and investor rights have a negative relationship and that both (although the latter to a lesser extent) are substitutes for trust. Second, all three variables have a positive effect on economic growth.
Marc Goergen
University of Sheffield Management School; European Corporate Governance Institute (ECGI)
July 2008
ECGI - Finance Working Paper No. 213/2008
Abstract:
To our knowledge, this is the first paper that investigates the links between trust, the institutional setting (in terms of employment protection legislation (EPL) and investor rights) and studies the impact of all three on economic performance. In line with the previous literature (e.g. Knack and Keefer (1997), Zak and Knack (2001)), we find that trust has a positive impact on GDP per capita growth. Our novel results are twofold. First, we find that EPL and investor rights have a negative relationship and that both (although the latter to a lesser extent) are substitutes for trust. Second, all three variables have a positive effect on economic growth.