This study explores the impact of societal trust on the economic behavior of nonprofit organizations. Although prior studies reveal that trust has a positive impact on the economic behavior of for-profit firms, the institutional differences between the two organization types make it unclear...

We examine the association between societal trust and the levels of CEO compensation and the proportion of equity-based compensation of 897 firm-years from 18 countries over the 2007- 2013 period. We find both the levels of CEO compensation as well as the proportion of equity based compensation...

This paper contributes to the literature by carrying out the first empirical investigation into the role of different types of enterprises in the creation of social trust. Drawing on a unique dataset collected through the administration of a questionnaire to a representative sample of the...

During the 2008-2009 financial crisis, firms with high social capital, measured as corporate social responsibility (CSR) intensity, had stock returns that were four to seven percentage points higher than firms with low social capital. High-CSR firms also experienced higher profitability, growth,...

We investigate whether social trust improves corporate innovation. Based on a comprehensive firm- level panel dataset of patents filed by companies from 45 countries over 1995–2015, we find that compared with firms in low-trust countries, firms in high-trust countries have higher innovation...

We extend prior literature by showing that societal trust is a significant determinant of corporate investment policy. Firms in countries with a higher level of societal trust are less prone to underinvestment. We posit that the association between trust and underinvestment relates to a...

The prior literature establishes that trust affects investment, however, whether it leads to investment efficiency is unaddressed. This study seeks to investigate the relationship between societal trust and corporate investment efficiency. The study documents a positive association between...

Corporate governance reforms have become more intrusive for banks than might be thought appropriate for “ordinary corporates”. “Heavier” regulation in this area is justified by the public interest at stake in bank activity and the risk to the public interest if a bank is allowed to fail...

We examine the impact of informal cultural attributes, such as generalized trust and civic cooperation in a society, on the presence of Big N auditors and audit fees in country-specific audit markets. On one hand, because societies with higher trust and civic cooperation are associated with low...

We examine how CEOs can facilitate the development of investor trust that helps mitigate the effects of negative information. Results from an experiment show that investors trust the CEO more and are more willing to invest in the firm when the CEO communicates firm news followed by a negative...