Externe Publikationen

Trust, Efficient Contracting and Export Upgrading

Ndubuisi, Gideon / Solomon Owusu
Externe Publikationen (2021)

in: The European Journal of Development Research 34, 2708–2729

DOI: https://doi.org/10.1057/s41287-021-00486-x

Informal contracting institutions constitute an essential part of a country’s overall contracting institution, however, the nascent literature examining the effect of contracting institutions on the quality of products a country produces and exports, have paid a limited attention on the role of informal contracting institutions. We fill this gap in the literature by examining whether higher trust levels, as an informal contracting institution, leads to product-quality upgrading by reducing contractual frictions and opportunistic behaviors. Using industry-level data spanning 1995–2014, we examined this relationship using the generalized difference-in-difference method. We find that contract-intensive industries in trust-intensive societies experience a disproportionally higher increase in the production and export of higher-quality products compared to those industries in low-trusting societies. This result holds after controlling for conventional sources of comparative advantage and formal contracting institution. Hence, the result underscores the importance of informal contracting institutions for improved economic performance and stress the crucial fact that countries with strong and efficient informal institutions can still benefit in market-related activities even in the presence of weak formal institutions.

Weitere Expert*innen zu diesem Thema

Berger, Axel


Brandi, Clara

Ökonomie und Politikwissenschaft 

Gitt, Florian


Kornher, Lukas


Nowack, Daniel


Roll, Michael


Sakketa, Tekalign Gutu


Vogel, Tim


Walle, Yabibal


Zintl, Tina



Cornelia Hornschild
Koordinatorin Publikationen

E-Mail Cornelia.Hornschild@idos-research.de
Telefon +49 (0)228 94927-135
Fax +49 (0)228 94927-130

Alexandra Fante
Bibliothekarin/Open Access-Koordinatorin

E-Mail Alexandra.Fante@idos-research.de
Telefon +49 (0)228 94927-321
Fax +49 (0)228 94927-130