Empirical Economics

, Volume 35, Issue 2, pp 251–274

Trust and growth: a shaky relationship

Original Paper

DOI: 10.1007/s00181-007-0158-x

Cite this article as:
Berggren, N., Elinder, M. & Jordahl, H. Empir Econ (2008) 35: 251. doi:10.1007/s00181-007-0158-x

Abstract

We conduct an extensive robustness analysis of the relationship between trust and growth by investigating a later time period and a bigger sample than in previous studies. In addition to robustness tests that focus on model uncertainty, we systematize the investigation of outlier influence on the results by using the robust estimation technique Least Trimmed Squares. We find that when outliers (especially China) are removed, the trust-growth relationship is no longer robust. On average, the trust coefficient is half as large as in previous findings.

Keywords

Trust Growth Robustness Social capital Outliers 

JEL Classification

O40 Z13 

Copyright information

© Springer-Verlag 2007

Authors and Affiliations

  • Niclas Berggren
    • 1
  • Mikael Elinder
    • 2
  • Henrik Jordahl
    • 3
    • 4
  1. 1.The Ratio InstituteStockholmSweden
  2. 2.Department of EconomicsUppsala UniversityUppsalaSweden
  3. 3.The Research Institute of Industrial EconomicsStockholmSweden
  4. 4.The Ratio InstituteStockholmSweden

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