Shahid Bahonar University of Kerman

 Statistics

Number of Journals26
Number of Issues447
Number of Articles4,563
Article View5,389,768
PDF Download3,592,574
Rahimi, A., Garshasbi Fakhr, S., Asayesh, H. (2022). Investigating the effect of trust on economic growth in developed and developing countries (Generalized Method of Moments (GMM)). , 7(1), 101-120. doi: 10.22103/jdc.2022.18687.1183
Afson Rahimi; Saeed Garshasbi Fakhr; Hamid Asayesh. "Investigating the effect of trust on economic growth in developed and developing countries (Generalized Method of Moments (GMM))". , 7, 1, 2022, 101-120. doi: 10.22103/jdc.2022.18687.1183
Rahimi, A., Garshasbi Fakhr, S., Asayesh, H. (2022). 'Investigating the effect of trust on economic growth in developed and developing countries (Generalized Method of Moments (GMM))', , 7(1), pp. 101-120. doi: 10.22103/jdc.2022.18687.1183
Rahimi, A., Garshasbi Fakhr, S., Asayesh, H. Investigating the effect of trust on economic growth in developed and developing countries (Generalized Method of Moments (GMM)). , 2022; 7(1): 101-120. doi: 10.22103/jdc.2022.18687.1183

Investigating the effect of trust on economic growth in developed and developing countries (Generalized Method of Moments (GMM))

توسعه و سرمایه
Article 6, Volume 7, Issue 1 - Serial Number 12, July 2022, Pages 101-120    PDF (873.9 K)
Document Type: Research Paper
DOI: 10.22103/jdc.2022.18687.1183
Authors
Afson Rahimi* 1; Saeed Garshasbi Fakhr2; Hamid Asayesh3
1PhD Candidate in Economics, Aligudarz University, Lorestan, Iran.
2Associate Professor of Economics, Bu Ali Sina University, Hamadan, Iran.
3Assistant Professor of Economics, Scientific Membership of Ayatollah Boroujerdi University, Economics.
Abstract
Objective: According to studies, one of the main determinants of economic growth and development is social capital, which has different components. One of the main components of social capital is "trust", which is an essential aspect of economic and social relations. Trust means as a positive expectation that the other party will not act opportunistically in their speech, actions and decisions. The result of some researches shows the difference between countries in terms of their industrial structure depends more on the level of their social capital than on the level of their developmental level, i.e., the degree of trust of individuals in one society to another and their participation in the formation of civic groups and associations. Emphasizing the importance of the role of trust in economic growth and to answer the question of whether the trust index in developing countries affects economic growth in a similar way to developed countries, the main purpose of this study is to show the trust index on economic growth in the two-selected groups of developed and developing countries in the period 2009-2019.
 Methods: To achieve this goal in this study, the trust index was first extracted from the World Value Survey. Then, to investigate the relationship between trust and innovation with economic growth in two selected groups of developed and developing countries, the two-stage Generalized Method of Moments (GMM) model has been used for dynamic panel data. Applying the GMM method has some advantages such as considering individual non homogeneous and more information, eliminating the biases in cross-sectional regressions. For a more detailed study of these indicators in addition to other effective control variables that are considered as factors affecting the economic growth and development of countries, are also added to the regression equation.  Delayed variables of GDP at real price, fixed capital formation, human development index, consumer inflation rate, innovation index, number of labor force, economic freedom index and trade openness index along with confidence index have been added to the model. The statistical population of the present study includes 26 developing countries including: Islamic Republic of Iran, Belarus, Brazil, Colombia, Ecuador, Egypt, Guatemala, Indonesia, Iraq, Jordan, Kazakhstan, Kyrgyzstan, Lebanon, Malaysia, Mexico, Nigeria, Pakistan, Peru, Philippines, Russia, Serbia, Thailand, Tunisia, Turkey, Ukraine and Vietnam and 25 developed countries including: Argentina, Australia, Canada, Chile, Cyprus, Estonia, Finland, France, Germany, Hong Kong, China, Hungary, Italy, Japan , Korea, Netherlands, New Zealand, Norway, Poland, Romania, Singapore, Slovenia, Spain, Sweden, Switzerland and the United States from 2009 to 2019 (statistics are available by year). These countries were grouped based on the Human Development Index so that countries with a human development index higher than 0/8 in the group of developed countries and less than 0/8 in the group of developing countries.
 Results: In both group of selected countries, the significance level of Sargan statistics is more than 0.05. At the 95% confidence level, the validity of the tools used in the estimation cannot be denied. So, the null hypothesis that the instruments of the disturbance are not correlated cannot be rejected. Therefore, it can be concluded that the instrumental variables used for estimation have the necessary validity. Also, the results show that all explanatory variables have unit root and the Kau test indicates a long-term relationship between variables and economic growth. According to the results, in countries with low levels of development, the variables related to the physical relations of production mainly affect economic growth. Also, the effect of the trust index on the economic growth of these countries is negative. In developed countries, as expected, the impact of the trust index on economic growth is positive. And for one percent increase in trust index, economic growth increases by 0.013 percent. The highest impact of the model variables on economic growth is related to the human development index, which will increase by 2.45% for one percent growth of this economic growth index. The positive impact of the lag of economic growth in both groups of developed and developing countries indicates that economic growth in these countries is subject to stable and long-term macroeconomic policies and requires forward-looking planning. According to theoretical expectations, by increasing the rate of fixed capital formation, labor force and economic freedom will lead to more economic growth in developed countries.
 Conclusion: According to the results, the trust index in the selected developed countries has a positive and significant effect on economic growth, but in the selected developing countries at a significant level of 90% has a negative effect on economic growth. This result shows that the developed countries have advantages due to the high level of trust in these countries: first, in result of trust, the communication and the transfer of information is done easily. Secondly, facilitating the transfer of information takes place in technological environments, which is one of the effective ways of trust category to solve the problem of information deficiency category of organizational learning. Finally, the problem of free riding is improved through group activities. But the inverse relationship between trust and economic growth in the selected developing countries can have two main reasons. First, the level of trust in economic policies in these countries is very low. Second, the issue of data quality is trust in these countries. Distrust, which is a form of formal and informal institutions in the economy that has always caused fear of partnership and cooperation between people, and people prefer distrust to avoid losses and limit their economic activities to the circle of friends and Their acquaintances do. One of policies that could develop trust level in developing countries is to increase institutional trust by improving the transparency and integrity of institutions. Another and even more important policy is related to educational programs in such a way that the main emphasis is shifted to the team working of students and strengthens cooperation between new generations. These policies are able to increase social capital and consequently public trust.
Keywords
Trust; Innovation; Economic Growth; World Value Survey
References
آرین‌مهر، شهرام؛ یحیی‌آبادی، ابوالفضل؛ هرتمنی، امیر (1392). بررسی تأثیر خصوصی‌سازی بر رشد اقتصادی در کشورهای عضو گروه D8 با استفاده از مدل پانل پویای برآوردشده به روش GMM. فصلنامه پژوهش‌های رشد و توسعه اقتصادی، 4(13)، 28-11.

رحمانی، تیمور؛ امیری، میثم (1386). بررسی تأثیر اعتماد بر رشد اقتصادی در استان‌های ایران با روش اقتصادسنجی فضایی. مجله تحقیقات اقتصادی، 78، 57-23.

رنانی، محسن؛ عمادزاده، مصطفی. مویدفر، رزیتا (1385). سرمایه اجتماعی و رشد اقتصادی: ارائه یک الگوی نظری. مجله پژوهشی دانشگاه اصفهان (علوم انسانی)، 21(2)، 148-129.

شاکری، عباس؛ مؤمنی، فرشاد؛ محمدی، تیمور؛ بهمن پور، حمید؛ علیزاده، سعیده (1393). بررسی اثر اعتماد بر نوآوری درکشورهای با درآمد متوسط (با تأکید بر شعاع بیاعتمادی فوکویاما). فصلنامـه علوم اقتصادی، 8(91)، 48-19.

علی‌کرمیان، اکرم؛ محمدزاده اصل، نازی؛ نایب، سعید (1395). تأثیر اعتماد اجتماعی بر رشد اقتصادی. پایان نامه برای دریافت درجه کارشناسی ارشد، دانشگاه آزاد اسلامی، واحد تهران مرکزی، دانشکده اقتصاد و حسابداری.

فرج‌زاده، زکریا؛ آماده، حمید؛ عمرانی، محمد (1396). عوامل تعیین‌کننده رشد اقتصادی ایران. مجله تحقیقات اقتصادی، 52(3)، 686-663.

فوکویاما، فرانسیس (1997). پایان نظم (بررسی سرمایه اجتماعی و حفظ آن). ترجمه: توسلی، غلامعباس. انتشارات جامعه ایرانیان، تهران.

قزاق، ارثقال؛ فیضی، سلیمان؛ محسنی زنوزی، سیدجمال الدین (1394). بررسی تأثیر تجارت، رشد اقتصادی و نابرابری درآمدی در کشورهای توسعه یافته و در حال توسعه. پایان نامه جهت اخذ درجه کارشناسی ارشد در رشته علوم اقتصادی. دانشگاه ارومیه. مرکز آموزش‌های نیمه حضوری. گروه اقتصاد.

گل‌خندان، ابوالقاسم؛ خوانساری، مجتبی. گل‌خندان، داود (1394). نظامی‌گری و رشد اقتصادی: شواهدی تجربی از کشورهای منطقه منا در قالب الگوی پانل پویا. فصلنامه پژوهش‌های رشد و توسعه اقتصادی، 5(18)، 50-31.

موحدمنش، صادق علی (1395). کاربرد روش گشتاور تعمیم‌یافته در بررسی تأثیر ضریب نفوذ بیمه بر تولید ناخالص داخلی: مطالعه ایران. فصلنامه پژوهش‌های رشد و توسعه اقتصادی، 6(24)، 78-65.

ندیری، محمد؛ محمدی، تیمور (1390). بررسی تأثیر ساختارهای نهادی بر رشد اقتصادی با روش GMM. فصلنامه مدلسازی اقتصادی، 5(3)، 24-1.

References

Algan, Y. (2018). Trust and social capital in for good measure: Advancing research on well-being metrics beyond GDP. Edited by Joseph Stiglitz. Jean-Paul Fitoussi and Martine Durand. Paris: OECD Publishing [CrossRef].

Algan, Y., Cahuc, P. (2009). Civic virtue and labor market institutions. American Economic Journal: Macroeconomics, 1(1), 111–145.

Algan, Y., Cahuc, P. (2010). Inherited trust and growth. The American Economic Review, 100, 2060–2092 [crossref].

Ali Karmian, A., Mohammadzadeh Asl, N. Deputy, S. (2016). The impact of social trust on economic growth. Thesis for Master's Degree, Islamic Azad University, Central Tehran Branch, Faculty of Economics and Accounting [In Persian].

Amiri, M., Rahmani, T. (2007). Investigating the effect of trust on economic growth in Iranian provinces by spatial econometric method. Journal of Economic Research, 78, 57-23 [In Persian].

Anderson, T.W., Cheng, H. (1981). Estimation of dynamic models with error components. Journal of the American Statistical Association. 76(375), 598-606. https://doi.org/10.2307/2287517.

Arellano, M., Bond, S. (1991). Some test of specification for panel data: Monte Carlo evidence and application to employment equations. Review of Economic Studies, 58, 277-297.

Arellano, M., Bover, O. (1995). Another look at the instrumental variable estimation of error component models. Journal of Econometrics, 68, 29-51.

Arinmehr, S., Yahyaabadi, A., Hertmani, A. (2013). Investigating the effect of privatization on economic growth in D8 member countries using the dynamic panel model estimated by GMM method. Quarterly Journal of Economic Growth and Development Research, 4(13), 11-28 [In Persian].

Arrow, K.J. (1972). Gifts and exchanges. Philosophy and Public Affairs, 1(4), 343-362.

Baltagi, B.H. (2008). Econometric analysis of panel data. Chichester: John Wiley & Sons Ltd.

Banfield, E. (1958). The moral basis of a backward society. New York: Free Press.

Beugelsdijk, S., Noorderhaven, N. (2004). Entrepreneurial attitude and economic growth: A cross-section of 54 regions. The Annals of Regional Science 38(2), 199-218.

Bidner, C., Francois, P. (2011). Cultivating trust: Norms, institutions and the implications of scale. Economic Journal, 121(5), 1097-1129.

Blundell, R., Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87, 115-143.

Bowles, S., Ginthis, H. (2007). Cooperation, in the new Palgrave dictionary of economics. Eds L. Blume and S.Durlauf.

Bowles, S., Polania-Reyes, S. (2012). Economic incentives and social preferences: Substitutes or complements? Journal of Economic Literature, 50(2), 368-425.

Chou, K.Y. (2006). Tree simple models of social capital and economic growth. Journal of Socio-Economic, 35, 889-912.

Coleman, J. (1990). Foundation of social theory. The belknap press of Harvard University Press, Cambridge MA.

Collier, P. (1998). The Role of the State in Economic Development: Cross-regional Experiences. Journal of African Economies, 7(2), 38–76.

Durlauf, S., Fafchamps, M. (2002). Social capital, the center for the study of African economices working paper series. http://www.bepress.com/case/ paper214.

Farajzadeh, Z., Ready, H., Imrani, M. (2017). Determinants of Iran's economic growth. Journal of Economic Research, 52(3), 686-663 [In Persian].

Fehr, E. (2009). On the economics and biology of trust, presidential address at the 2008 meeting of the European economic association. Journal of the European Economic Association, 7(2-3), 235-266.

Fehr, E., Gatcher, S. (2000). Cooperation and punishment in public goods games. American Economic Review, 4, 980-994.

Fehr, E., Schimdt, K. (1999). A theory of fairness, competition and cooperation. Quarterly Journal of Economics, 114(3), 817-868.

François, P. (2002). Social Capital and Economic Development. Rutledge, First Published.

Francois, P., Zabojnik, J. (2005). Trust, social capital, and economic development. Journal of the European Economic Association, MIT Press, 3(1), 03, 51-94.

Fukuyama, F. (1995). Trust: the social virtues and the creation of prosperity. New York: Free Press.

Fukuyama, F. (1997). The end of order (Study of social capital and its preservation). Translated by Tavassoli, Gholamabbas. Iranian Society Publications, Tehran. [In Persian].

Fukuyama, F. (1999). Social Capital and Civil Society. IMF Working Paper No. 00/74, Available at SSRN: https://ssrn.com/abstract=879582.

Ghazgh, E; Feizi, S., Mohseni Zanozi, S.J. (1394). Investigating the impact of trade, economic growth and income inequality in developed and developing countries. Master Thesis, Urmia University. Part-time training center. Department of Economics [In Persian].

Gintis, H., Bowles, S., Boyd, R., Fehr, E. (2005). Moral sentiments and. material interests: origins, evidence, and. consequences. Chapter 1, in Moral Sentiments and. Material Interests, MIT Press.

Golkhandan, A., Khansari, M., Gulkhandan, D. (2015). Militarism and economic growth: Empirical evidence from the countries of the Mena region in the form of a dynamic panel model. Journal of Economic Growth and Development Research, 5(18), 31-50 [In Persian].

Gordon, M.T. (2000). Public trust in government; the USA media as an agent accountability. International Review of Administrative Sciences, 66(2), 297-310.

Greene, W.H. (2008). Econometric analysis – sixth edition. New Jersey, Upper Saddle River: Pearson International.

Guiso L., Sapienza, P., Zingales, L. (2011). Civic capital as the missing link, handbook of social economics. Volume 1A, Jess Benhabib, Alberto Bisin, and Matthew O. Jackson, Eds.

Hoff, K., Kshetramade, M., Fehr, E. (2011). Caste and Punishment: the legacy of caste culture in norm enforcement. Economic Journal, 121, 449-475.

Kahneman, D., Tversky, A. (2000). Choices, values and frames. Cambridge University Press.

Knack, S., Keefer, P. (1997). Does social capital have an economic payoff? A cross-country investigation. The Quarterly Journal of Economics, 112, 1251–1288.

Levi, M., Stoker, L. (2000). Political trust and trustworthiness. Annual Review of Political Science, 3, 475-507.

Levin, F, Lin, S., Chu, J. (2002). Unit root tests in panel data: asymptotic and finite-sample properties. Journal of Econometrics, 108(1), 1-24.

Matyas, L., Sevestre, P. (1991). Proper econometric specification of the gravity model. The World Economy, 20, 363-369.

Miniesy, R.S., AbdelKarim, M. )2021(. Generalized trust and economic growth: The nexus in MENA countries. Economies, 9:39. https://oi.org/10.3390/economie 9010039

Movahedmanesh, S.A. (2016). Application of generalized method of moments method in investigating the effect of insurance penetration coefficient on GDP: Iranian study. Quarterly Journal of Economic Growth and Development Research, 6(24), 65-78 [In Persian].

Nadiri, M., Mohammadi, T. (2011). Investigating the Impact of Institutional Structures on Economic Growth by GMM. Method Economic Modeling Quarterly, 5(3), 1-24 [In Persian].

Platteau, J.P. (1994). Behind the market stage where real societies exist: Part1 and the role of public and private order institutional. Journal of Development Studies, 30(3), 533-577.

Putnam, R. (2000). Bowling alone: The collapse and revival of American community. New York: Simon and Schuster.

Putnam, R. (2005). Enjoyed society, social capital and public life, in the book: Social capital, trust, democracy and development, Kian Tajbakhsh. Translated by Khakbaz, A., Poyan, H. Nashrashirazeh, Tehran [In Persian].

Renani, M., Emadzadeh, M., Moayedfar, R. (2006). Social capital and economic growth: presenting a theoretical model. University of Isfahan Research Journal (Humanities), 21(2), 129-148 [In Persian].

Rooter, J.B. (1967). A new scale for the measurement of interpersonal trust. Journal of Personality, 35(4), 651-665.

Roth, F. (2009). Who can be trusted after the financial crisis? CEPS Working Document No. 322.

Shakeri, A., Momeni, F., Mohammadi, T., Bahmanpour, H., Alizadeh, S. (2014). Investigating the effect of trust on innovation in middle-income countries (with emphasis on Fukuyama's radius of distrust). Quarterly Journal of Economic Sciences, 8(9), 48-19 [In Persian].

Tabellini, G. (2008b). Institutions and culture. Journal of the European Economic Association, Papers and Proceedings, 6(2-3).

Thompson, M. (2018). Social capital, innovation and economic growth. Journal of Behavioral and Experimental Economics, 73, 46-52.

Weel, B., Akçomak, I. S. (2008). Social capital, innovation and growth: Evidence from Europe. UNU-MERIT Working Paper, No: 2008-040.

Whiteley, P. (2000). Economic growth and social capital. Political Studies, 48, 443-466.

Yeli-Renko H., Autio E., Tontti, V. (2002). Social capital, knowledge and the international growth of technology-based new firms. International Business Review, 11, 279-304.

Statistics
Article View: 600
PDF Download: 357


Journal management system. designed by sinaweb