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Social trust, workplace organization, and the comparative advantage of nations

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  • André van HoornBy

Abstract

In this paper, I consider a specific channel through which trust between parties to an exchange can go on to affect nations’ comparative advantage in certain industries. My approach revolves around the autonomy that employers (principals) grant to workers (agents), which is a key feature of workplace organization. I hypothesize that social trust generates a comparative advantage in industries with more autonomous micro production environments. I employ individual-level data on work autonomy to construct a measure of the extent to which industries are characterized by autonomy in the production process. Results of a cross-country cross-industry analysis confirm that countries with higher levels of social trust have a comparative advantage in high-autonomy industries and vice versa. Results are robust to the possibility of reverse causality. The paper’s key contribution is to provide a link between the microeconomic literature on workplace organization and the comparative macroeconomic literature on social trust.

Suggested Citation

  • André van HoornBy, 2017. "Social trust, workplace organization, and the comparative advantage of nations," Oxford Economic Papers, Oxford University Press, vol. 69(4), pages 897-917.
    • Handle: RePEc:oup:oxecpp:v:69:y:2017:i:4:p:897-917.
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    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P50 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - General

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