Using establishment-level count data, we investigate the relationship between employee trust of their managers and both: (i) product- market conditions; and (ii) the observability of manager’s actions within the firm. When demand is expanding (contracting), average employee trust of their...

It is not possible for a formal employment contract to detail everything an employee should do and when. Informal relationships, in particular trust, allow managers to arrange a business in a more productive way; high-trust firms are both more profitable and faster growing. For example, if they...

Using a unique employee-establishment matched survey, we find a causal relationship between an individual employee's trust of management and the delegation of real authority. We utilize both fixed effects and instrumental variables to control for unobserved factors: establishment-level fixed...

Using a unique matched survey of employees and establishments, we examine the relationship between delegation of decision-making authority and individual worker's trust of management. Utilizing a fixed-effects approach to control for unobserved management quality and establishment...