Social Exchange and Generalized Trust in China

Sonja Opper, Jerker Holm, Victor Nee

Research output: Working paper/PreprintWorking paper

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.
Original languageEnglish
PublisherDepartment of Economics, Lund University
Publication statusPublished - 2014

Publication series

NameWorking Paper / Department of Economics, School of Economics and Management, Lund University
No.30

Subject classification (UKÄ)

  • Economics

Keywords

  • Generalized Trust
  • Networks
  • Social Exchange
  • Norms
  • CEOs

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