This paper examines the effect of trust in a micro-economic environment, where trust is clearly exogenous. Using a hand …-collected data on European venture capital, we show that the Eurobarometer measure of trust among nations significantly affects … and transaction costs. The national identity of venture capital firms' partners is shown to matter for the effect of trust …

We examine the effect of trust on financial investment and contracting decisions in a micro-economic environment where … trust is exogenous. Using hand-collected data on European venture capital, we show that the Eurobarometer measure of trust … partners further contributes to the effect of trust. Education and work experience reduce the effect of trust but do not …

We examine the effect of trust on financial investment and contracting decisions in a micro-economic environment where … trust is exogenous. Using hand-collected data on European venture capital, we show that the Eurobarometer measure of trust … partners further contributes to the effect of trust. Education and work experience reduce the effect of trust but do not …