The Decline of Trust Across the U.S. Finance Industry

45 Pages Posted: 10 Apr 2020 Last revised: 26 Jul 2023

See all articles by Peter Limbach

Peter Limbach

University of Bielefeld; Centre for Financial Research (CFR)

P. Raghavendra Rau

University of Cambridge

Henrik Schürmann

BUW - Schumpeter School of Business and Economics

Multiple version iconThere are 2 versions of this paper

Date Written: June 20, 2023

Abstract

We provide evidence on the evolution of generalized trust among finance professionals using data from the General Social Survey over the period 1978-2016. Accounting for demographic, regional, and socioeconomic characteristics, we document a significant decline in the level of trust among finance professionals relative to the decline of trust in the U.S. population. This decline is unique to the finance industry and is particularly strong in the early years of the sample when finance professionals initially exhibited a higher level of trust than the average American. The decline occurs across all subsectors in finance and at all hierarchy levels.

Keywords: Finance industry, Generalized trust, Implicit incentives, Professional environment, Socialization

JEL Classification: G20, G21, G22, G24, L14, A14

Suggested Citation

Limbach, Peter and Rau, P. Raghavendra and Schürmann, Henrik, The Decline of Trust Across the U.S. Finance Industry (June 20, 2023). Journal of Economic Behavior and Organization, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3559047 or http://dx.doi.org/10.2139/ssrn.3559047

Peter Limbach

University of Bielefeld ( email )

Centre for Financial Research (CFR) ( email )

Albertus-Magnus-Platz
Köln, 50923
Germany

HOME PAGE: http://www.finance.uni-koeln.de

P. Raghavendra Rau (Contact Author)

University of Cambridge ( email )

Cambridge Judge Business School
Trumpington Street
Cambridge, Cambridgeshire CB21AG
United Kingdom
3103626793 (Phone)

HOME PAGE: http://www.raghurau.com/

Henrik Schürmann

BUW - Schumpeter School of Business and Economics ( email )

Gaußstraße 20
Wuppertal, 42119
Germany

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