Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1130: Does Country Level Social Trust Predict the Size of the Sharing Economy?

Andreas Bergh () and Alexander Funcke
Additional contact information
Andreas Bergh: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, and Lund University, Lund, Sweden
Alexander Funcke: Philosophy, Politics & Economics, Postal: University of Pennsylvania

Abstract: The sharing economy (peer-to-peer based sharing or renting activities coordinated through community-based online services) is typically assumed to be closely related to social trust. The two sharing economy companies Airbnb and Flipkey exist in over 100 countries, allowing us to construct a measure of sharing economy penetration to test against social trust and other potential explanations. Results indicate that sharing economy penetration is promoted by ICT-infrastructure and economic openness, whereas the correlation with social trust is negative and often statistically significant. Our conclusion is that sharing economy services do not require high levels of social trust to succeed. Rather, they provide institutions that facilitate trust-intensive economic activities also where social trust is low.

Keywords: Sharing economy; Trust; Information technology

JEL-codes: E20; M13; O17

10 pages, August 19, 2016

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