Trust, Incomplete Contracting, and Corporate Innovation

• 成果类型: Article
• 署名作者: Xie, Fei; Zhang, Bohui; Zhang, Wenrui
• 署名单位: University of Delaware; European Corporate Governance Institute; The Chinese University of Hong Kong, Shenzhen; Chinese University of Hong Kong
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2021.4055
• 发表日期: 2022
• 页码: 3419-3443
• 关键词: trust; INNOVATION; Incomplete contracting; collaboration; risk taking

摘要

Innovation is a contract-intensive economic activity in a world of incomplete contracts. We show that trust mitigates incomplete contracting and enhances innovation by acting as an informal contracting mechanism. Trust plays an especially important role when formal laws and regulations are lacking, and it promotes innovation by encouraging collaboration and fostering tolerance for failure. Further analyses show that trust also facilitates cross-border technological spillover and innovation collaboration. Overall, our evidence highlights innovation as a key conduit through which trust affects economic growth.