Trust, Owner Rights, Employees and Firm Performance

Trust, Owner Rights, Employees and Firm Performance

Marc Goergen, Salim Chahine, Chris Brewster, Geoffrey Wood

Series number :

Serial Number: 
336/2012

Date posted :

August 01 2012

Last revised :

September 18 2012
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Keywords

  • Corporate governance • 
  • trust • 
  • investor protection • 
  • employment protection legislation • 
  • institutions and economic growth

This is a study of variations in trust relations according to institutional setting. A wide body of comparative institutional literature within economics and finance engages with trust. However, as most comparative institutional literature uses macro-level data and/or stylistic ideal types, it normally neglects intra-firm trust.

This paper redresses this lacuna by using both macro-level data and comparative firm-level evidence. We found that both country trust and firm-level trust have a positive impact on performance, and that they act as substitutes for each other. Both employee rights and investor rights are negatively correlated with country trust.

Authors

Real name: 
Chris Brewster
Real name: 
Geoffrey Wood