The formal and informal institutional framework of capital accumulation

We study the impact of trust and formal legal institutions on investment in a panel of countries. * Both social trust and the quality of formal legal institutions have a positive impact on capital accumulation. * Social trust and the quality of formal legal institutions are substitutes. * These findings apply both to total investment and to foreign direct investment. This paper studies the impact of social trust and formal legal institutions on capital accumulation in a panel of countries. The results not only confirm that both social trust and the quality of formal legal institutions have a p... Mehr ...