Money Following Trust: Evidence from China’s High‐Value Payment System

Abstract

This study enriches the economic consequence of trust from the perspective of cash flow. It analyzes the impact of trust on interprovincial cash flow using matching data pertaining to Chinese provincial trust and the high‐value payment system in 2006–2010. It further investigates trust’s effect in different legal protection scenarios to explore the interactive role of formal and informal institutions. The results indicate that trust can significantly promote interprovincial cash flow and it persists after addressing endogeneity concerns and across different methods. However, this effect is only significant or much larger in provinces with less legal protection, indicating the alternative roles played by trust and formal institutions.

Initial Coin Offering and Cryptocurrencies: Shifting Trust Away from Human Actors and toward a Cryptographic System

“…Without it, business is impossible and marketing fails (Audi, 2008: p. 97, 100). So, more trust may spur economic success (Glaeser, Laibson, Scheinkman, & Soutter, 2000: p. 811 (Qian, Zhang, & Cao, 2018), facilitate transactions (Alesina & Ferrara, 2002), promote international trade (Guiso, Sapienza, & Zingales, 2009), economic growth (Zak & Knack, 2001), micro-corporate financing (Bottazzi, Rin, & Hellmann, 2016) or mergers and acquisitions (Ahern, Daminelli, & Fracassi, 2015).…”