Trust and Specialization in Complexity: Evidence from U.S. States

https://www.crrep.ca/trust-and-specialization-evidence-us-states

51 Pages Posted: 18 May 2021

See all articles by José De Sousa

José De Sousa

University of Paris-Saclay

Amelie Guillin

Johannes Kepler University

Julie Lochard

University Paris-Est Créteil (UPEC) - ERUDITE

Arthur Silve

Université Laval

Date Written: January 31, 2021

Abstract

In this paper, we show that trust favors specialization in complexity. U.S. states with a high level of generalized trust tend to specialize in industries involving more complex input-output relationships. This pattern is not driven by differences in the states’ other observable characteristics or unobservable time-varying industry- or state-specific factors and does not reflect selection by export destination. Although theoretical considerations suggest that trust may be endogenous to the location of complex industries, an instrumental variable strategy that leverages the impact of racial discrimination confirms that trust is a factor in the specialization of U.S. states in more complex industries.

Keywords: Trust, Specialization, Complexity, Input-Output Relationships

JEL Classification: F10, Z13

Suggested Citation

De Sousa, José and Guillin, Amelie and Lochard, Julie and Silve, Arthur, Trust and Specialization in Complexity: Evidence from U.S. States (January 31, 2021). https://www.crrep.ca/trust-and-specialization-evidence-us-states, Available at SSRN: https://ssrn.com/abstract=3848209 or http://dx.doi.org/10.2139/ssrn.3848209

José De Sousa

University of Paris-Saclay ( email )

55 Avenue de Paris
Versailles, 78000
France

Amelie Guillin

Johannes Kepler University ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Julie Lochard

University Paris-Est Créteil (UPEC) - ERUDITE ( email )

Mail des Mèches
61 avenue du Général de Gaulle
Créteil Cedex, 94010
France

Arthur Silve (Contact Author)

Université Laval ( email )

1025 avenue des sciences-humaines
Québec, QC G1V 0A6
Canada
4186562131 (Phone)
4186562131 (Fax)

HOME PAGE: http://https://www.fss.ulaval.ca/notre-faculte/repertoire-du-personnel/arthur-silve

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