Trust, owner rights, employee rights and firm performance

Marc Goergen, Salim Chahine, Chris J Brewster, Geoffrey Wood

Research output: Contribution to journalArticleResearchpeer-review

28 Citations (Scopus)

Abstract

This is a study of variations in trust relationships according to institutional setting. A wide body of comparative institutional literature within economics and finance engages with trust. However, as most of this 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 trust increase firm performance, but that there is a trade-off between the two as high levels of both reduce performance. Finally, both employee rights and investor rights are negatively correlated with country trust.

Original languageEnglish
Pages (from-to)589-619
Number of pages31
JournalJournal of Business Finance and Accounting
Volume40
Issue number5-6
DOIs
Publication statusPublished - Jun 2013
Externally publishedYes

Keywords

  • Corporate governance
  • Employment protection legislation
  • Institutions and economic growth
  • Investor protection
  • Trust

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