Trust, Owner Rights, Employees and Firm Performance
53 Pages Posted: 22 Jul 2012 Last revised: 9 Nov 2018
Date Written: July 21, 2012
This is a study of variations in trust relations according to institutional setting. A wide body of comparative institutional literature within economics and finance engages with trust. However, as most comparative institutional literature uses macro-level data and/or stylistic ideal types, it normally neglects intra-firm trust. This paper redresses this lacuna by using both macro-level data and comparative firm-level evidence. We found that both country trust and firm-level trust have a positive impact on performance, and that they act as substitutes for each other. Both employee rights and investor rights are negatively correlated with country trust.
Keywords: Corporate governance, trust, investor protection, employment protection legislation, institutions and economic growth
JEL Classification: G34, K20, O16
Suggested Citation: Suggested Citation