Structure and Development of Financial Institutions and Links with Trust: Cross-Country Evidence

25 Pages Posted: 21 Apr 2011

See all articles by Arturo José Galindo

Arturo José Galindo

Inter-American Development Bank

Alberto Chong

University of Ottawa

César A. Calderón

Central Bank of Chile

Date Written: April 2001

Abstract

We explore the links between trust and a broad range of financial structure and development measures. Our base sample is a cross section of 48 countries and the analysis covers the period 1980-1994. We use a new World Bank data set that provides the most comprehensive coverage of financial development and structure to this date. We find that trust is correlated with financial depth and efficiency as well as with stock market development. Results hold when using an instrumental variable approach, and they are robust to changes in specification when using a formal Sala-i-Martín sensitivity analysis.

Suggested Citation

Galindo, Arturo José and Chong, Alberto and Calderon, Cesar A., Structure and Development of Financial Institutions and Links with Trust: Cross-Country Evidence (April 2001). IDB Working Paper No. 373, Available at SSRN: https://ssrn.com/abstract=1817243 or http://dx.doi.org/10.2139/ssrn.1817243

Arturo José Galindo (Contact Author)

Inter-American Development Bank ( email )

1300 New York Avenue NW
Washington, DC 20577
United States

Alberto Chong

University of Ottawa ( email )

2292 Edwin Crescent
Ottawa, Ontario K2C 1H7
Canada

Cesar A. Calderon

Central Bank of Chile ( email )

Agustinas 1180
Santiago
Chile

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