Working Papers, Department of Economics, Lund University
Social Exchange and Generalized Trust in China
(), Sonja Opper
() and Hakan J. Holm
Abstract: This paper examines how social relations and norms
contribute to the emergence of generalized trust in economic action. Our
core proposition is that the more positive the local social exchange
relationship, the greater an actor’s propensity to place trust in
strangers. Our research design integrates behavioral measures elicited by
incentivized experimental trust games with survey data using a random
sample of 540 founding CEOs of manufacturing firms in the Yangzi delta
region of China. Our analysis shows that characteristics of repeated social
exchange—depth, prosociality and control—are positively associated with an
economic actor’s proclivity for generalized trust. Founder CEOs with deeper
and more valued exchange relations are more likely to trust strangers.
Likewise, we find robust evidence of a positive association between beliefs
in the effectiveness of community social control and trust in strangers.
Keywords: Generalized Trust; Networks; Social Exchange; Norms; CEOs; (follow links to similar papers)
JEL-Codes: C90; D85; L26; (follow links to similar papers)
46 pages, August 21, 2014
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