Determinants of the Trust Radius: A Panel Data Analysis

Abstract

In this study, the groundbreaking quantification method of the trust radius of Delhey, Newton and Welzel (2011) is followed, and is analyzed over time. For the first time the trust radius is analyzed across multiple countries and time periods, resulting in a panel data analysis. Three exogenous societal events have been identified that are deemed to be powerful enough to determine the trust radius over time. These three determinants are corruption, terrorism and economic prosperity. The last three WVS waves are used to measure the radius, resulting in a dataset that covers 65 different countries with two or three radius observations. A fixed effects analysis is conducted in order to answer the research question of whether we can identify the medium-term determinants of the trust radius. The panel analysis does not produce conclusive results to support the hypotheses regarding time-variant determinants. The results do leave an increase amount of criticism behind regarding the quantification method over time. The cross-sectional side analysis does find support for the previously found relationship between individualism and the radius of trust.