Friday, October 2, 2009

Competitive Markets Lead To Higher Worker Trust Levels

There is a strong positive relationship in the US between individual reported trust levels and the competitiveness of the US business sector in which an individual works, according to researchers Patrick Francois, University of British Columbia, Department of Economics and Tanguy Van Ypersele, National Center for Scientific Research, Research Group in Quantitative Saving, Centre for Economic Policy Research.

The authors "ask what effect, if any, does market competition have on trust?" in their research paper, "Doux Commerces: Does Market Competition Cause Trust?"

They report:
Individuals working in sectors that are more competitive have significantly higher levels of reported trust than individuals working in less competitive sectors. To our knowledge, this is the first time a relationship between industry level competition and employee trust levels has been analyzed. This correlation persisted in all specifications, and is not due to competitive sectors having more supervision, smaller workplaces, or more congenial relations between work colleagues. It also does not appear to be due to individuals with high trust being selected into competitive sectors, or these sectors attracting people with low levels of risk aversion. The existence of this relationship is robust, statistically significant and large...
Read the complete ungated version here.

The SSRN gated version of the paper, with an ungated abstract, is available here. (HT: Art Carden, Division of Labour blog)

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