Trust and delegation: Theory and evidence

Gur N., Bjørnskov C.

Journal of Comparative Economics, cilt.45, sa.3, ss.644-657, 2017 (SSCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 45 Sayı: 3
  • Basım Tarihi: 2017
  • Doi Numarası: 10.1016/j.jce.2016.02.002
  • Dergi Adı: Journal of Comparative Economics
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus
  • Sayfa Sayıları: ss.644-657
  • Anahtar Kelimeler: Social trust, Economic development, Delegation
  • İstanbul Medipol Üniversitesi Adresli: Evet

Özet

Social trust is associated with good economic performance, but little is known about the transmission mechanisms connecting trust and performance. We explore the effect of trust on delegation decisions. In a theoretical framework, we note that delegation is a low-cost option when management decisions can be implemented without monitoring. This option is, however, risky and more likely to be profitable in higher-trust environments. In a set of cross-country regressions, we show a strong association between trust and delegation, which is increasing in economic sophistication.