Cultural biases in economic exchange
By: Luigi Guiso, Paola Sapienza, Luigi Zingales.
Contributors: Sapienza, Paola.; Zingales, Luigi.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 11005; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 11005.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Discrimination -- Europe.; Europe -- Commerce -- Social aspects.
Description: "How much do cultural biases affect economic exchange? We try to answer this question by using the relative trust European citizens have for citizens of other countries.  First, we document that this trust is affected not only by objective characteristics of the country being trusted, but also by cultural aspects such as religion, a history of conflicts, and genetic similarities.  We then find that lower relative levels of trust toward citizens of a country lead to less trade with that country, less portfolio investment, and less direct investment in that country, even after controlling for the objective characteristics of that country.  This effect is stronger for goods that are more trust intensive and doubles or triples when trust is instrumented with its cultural determinants.  We conclude that perceptions rooted in culture are important (and generally omitted) determinants of economic exchange"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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