Outgroup Trust Research Articles

Trust and Risk: Evidence from Rural Banks in Emerging Market

Research Originality: This research is the first to discuss how rural bank risk-taking behaviour is affected by trust in particular when the poverty rate is high.Research Objectives: This research aims to investigate how risk in rural banks is shaped by the two dimensions of trust by taking into account different poverty levels across the regionResearch Methods: To thoroughly conduct our research, we use quarterly dataset of rural banks obtained from Otoritas Jasa Keuangan (OJK) for the period of 2010Q2 to 2016Q3 when the bail-out regime was still in effect. We employ a random effect model to account for individual heterogeneity.Empirical Result: Our evidence suggests that in-group trust is detrimental to rural banks’ risk. Conversely, out-group trust positively affects rural banks’ stability only if the region has a lower poverty level.Implications: To reduce risk, the rural bank has to use social capital and penetrate informally to the market where in-group trust is high to be able to compete with informal lending and to contribute better to society.JEL Classification: G21, G28, G32How to Cite:Trinugroho, I., Achsanta, A. F., Arifin, T., & Saputro, N. (2024). Trust and Risk Evidence from Rural Banks in Emerging Markets. Etikonomi, 23(2), 287 – 298. https://doi.org/10.15408/etk.v23i2.35775

Positive and negative intergroup contact: Evidence of their interactions in a child sample

AbstractResearch has demonstrated that positive intergroup contact improves intergroup relations among children. However, empirical evidence about how positive and negative intergroup contact relates to intergroup outcomes at different ages is scant. By combining theories and empirical evidence in social and developmental psychology, this study aimed to examine positive and negative intergroup contact in a sample of N = 394, 9 and 12‐year‐old Italian children (females and males). We expected to find interactive effects of positive and negative intergroup contact on outgroup trust and behavioural intentions. Furthermore, for both types of contact, we predicted that associations with intergroup outcomes (outgroup trust, behavioural intentions) would be stronger among older than younger children. Results provided support for the interactive effects of positive and negative intergroup contact (bs ≥ .08, ps ≤ .08, interaction coefficients), but not for age‐related differences. Negative intergroup contact facilitated the effects of positive intergroup contact and positive intergroup contact buffered the effects of negative intergroup contact. These findings suggest that intergroup relations in childhood can be improved by creating opportunities for positive intergroup contact in educational and social settings.

Methodology of the comparative sociology of trust (case study of Russia and China)

The article deals with the methodological issues of the comparative sociology of trust. In order to compare the level of trust in different countries a set of indicators is proposed (generalized trust; particularized trust; trust radius; institutional trust). The problems of measuring generalized and institutional trust in China and Russia are revealed. Based on World Values Survey data, a comparative analysis of trust levels in the Russian Federation and China is carried out. The authors also present data from their own empirical study of trust (telephone survey of the population in St. Petersburg and Leningradskaya Oblast; Internet study of trust, in-depth interviews of both residents of the Russian Federation and the People’s Republic of China). To explain the processes of transformation of trust in the Russian Federation and China, a modernization approach is used and the role of a culture of trust is revealed. China has a high level of both generalized and institutionalized trust based on its own specific culture of trust. But the radius of trust is narrow and indicators of out-group trust are extremely low. In Russia, the level of generalized trust is low, but the level of institutional trust is average, radius of trust is wider and the level of out-group trust is higher. Particularized trust is approximately the same in China and Russia; at least, we have not identified any special “familistic culture of trust”.

Social antagonism, identity-driven beliefs, and loss avoidance: Evidence from Guinea

We use a lab-in-the-field experiment to study identity preferences, other-regarding beliefs, and conflict behavior among the Fulani and Malinke in Guinea, Sub-Saharan Africa. In a hawk-dove game, we explore the existence of out-group hostility and ingroup cooperation compared to the baseline where pairs are uninformed of each other's region of origin. We observe that ethnic identity, especially among the Malinke, encourages loss aversion in situations where negative earnings are possible. Identitydriven beliefs, i.e. expectations of others, lead to either reciprocity among homogeneous pairs or materialism in diverse pairs. Using complementary survey data, we also find that high out-group trust and less linguistic diversity are correlated with conflict avoidance.

Resilience or decline of informal networks? Examining the role of trust context in network societies

The nature of informal networks in various societies, and particularly whether they recede or tend to persist over time, has long been a subject of discussion in international business studies. However, empirical research on trust in network-oriented societies, where individuals typically maintain somewhat different relationships with their in-group, out-group, and non-specified others, remains limited. Drawing on insights from informal network research and intergroup contact theory to model trust relationships in network societies, 882 respondents from three network societies -- China, Russia, and South Korea -- were surveyed, and confirmatory factor and path analyses applied. The results suggest that as network importance increases, both in-group trust and out-group trust also increase. Individuals who more commonly draw upon out-group trust ties attach less importance to in-group trust ties. Increases in non-specific trust, however, are associated with increases in both in-group and out-group trust, pointing towards the boundary spanning function of non-specific trust. Consequently, rather than finding a clear indication of whether informal networks persist or recede, ambivalent trust relationships were observed. This calls for a reexamination of the conventional ‘either/or’ perspective on the nature of informal networks. This network heterogeneity can be attributed to individuals, especially in developing network societies, utilizing a ‘both/and’ approach to trust and networking, and yielding more economic opportunities.

Impacts of trust on the cost of debt financing: The perspectives of in-group trust and out-group trust

This paper explores the impact of different types of trust on the cost of debt financing. Using trust data from the World Values Survey (WVS) and data on the listed companies in China, we find that in-group (out-group) trust has a positive (negative) impact on the cost of debt financing. We also establish that better corporate performance strengthens the impacts of the two types of trust, and higher external supervision weakens the impact of out-group trust. Further investigation finds that in-group (out-group) trust significantly impacts companies with weak (strong) financing constraints.

The shadow of the family: Historical roots of social trust in Europe.

This study provides new evidence on how historical patterns of household formation shape the present-day level of trust. We test two distinct features of historical family arrangements that might be harmful to trust towards out-groups: (a) family extendedness in terms of the number of household members, and (b) generational hierarchy and gender relations within the household. To conduct our study, we compiled a historical database that reflects family structure and socio-economic development, mostly in the 19th century. The analysis was performed on a sample of 94 historical subnational units within eight contemporary Western and Eastern European countries that participated in the Life in Transition Survey in 2010. We find that cohabitation of several generations within the historical family and power of older generations over the younger are detrimental for out-group trust today. By contrast, family extendedness per se was revealed to have no impact on trust.

You get us, so you like us: Feeling understood by an outgroup predicts more positive intergroup relations via perceived positive regard.

Intergroup felt understanding-the belief that outgroup members understand and accept ingroup perspectives-has been found to predict positive intergroup outcomes, but the mechanism through which it has its positive effects is unclear. Across eight studies, we tested the hypothesis that felt positive regard-the perception that outgroup members like and respect ingroup members-mediates the positive effects of felt understanding on outcomes like outgroup trust. Studies 1-6 (total N = 1,366) included cross-sectional and experimental designs and a range of intergroup settings such as Sunni-Shia relations in Lebanon, gender relations, and support for "Brexit" in the United Kingdom. Results of meta-analytic structural equation models across these studies provided evidence of the indirect effect of felt understanding via felt positive regard on outcomes including trust and positive relational emotions. Study 7 (N = 307) then tested the causal effect of felt positive regard through a direct manipulation. Findings confirmed that felt positive (vs. negative) regard did lead to more positive intergroup perceptions. Finally, Study 8 (N = 410) tested the indirect effect as a within-person change process using a year-long, two-wave study of the conflict in Chile between Indigenous Mapuche and Non-Indigenous Chileans: Change over time in felt understanding indirectly predicted change over time in trust via change in felt positive regard. We consider the theoretical implications of the findings for how intergroup relations may be improved and the possibilities presented by felt understanding for intervention development. (PsycInfo Database Record (c) 2024 APA, all rights reserved).

Identity fusion is associated with outgroup trust and social exploration: Evidence for the fusion-secure base hypothesis.

Identity fusion - a powerful form of group alignment - is a strong predictor of using violence to defend the ingroup. However, recent theorizing suggests, in the absence of outgroup threat, fusion may instead promote intergroup trust and cooperation. Across five studies we find evidence that fusion to a range of groups (e.g., country, football team) was consistently positively associated with a willingness to trust others generally, trust outgroup members, and social exploration. An internal meta-analysis indicated that fusion was more strongly associated with trust and social exploration, compared to several measures of group identification. These findings provide support for the fusion-secure base hypothesis (Personality and Social Psychology Review. 2023, 27(2), 107-127) and suggest that fusion has the potential to increase a willingness to interact with, and trust, outgroup members.

Ingroup Trust, Outgroup Trust, and Internet Use During Situational Crises: Evidence from Chinese Panel Data, 2016–2020

Ingroup Trust, Outgroup Trust, and Internet Use During Situational Crises: Evidence from Chinese Panel Data, 2016–2020

Violent Conflict and Informal Institutions: Evidence from a Civil Conflict in Pakistan

Conflicts have a variety of economic, social, and institutional consequences. In this study, we analyse the institutional legacies of violent conflicts by providing evidence from a civil conflict which occurred in the district Swat of Khyber-Pakhtunkhwa (KP), Pakistan. We consider three dimensions, i.e. Trust, Participation, and Cooperation, of informal institutions. District Buner—the neighboring district, is taken as the control district. A random sample of 500 households from each district is selected and Ordinary Least Squares (OLS) and Spatial Regression Discontinuity Design (SRDD) are employed for estimation. We find that exposure to violence undermines out-group trust and trust in governmental organisations; however, it promotes within-group trust and trust in Non-Governmental Organisations (NGOs). Likewise, conflicts stimulate participation in social organisations, political activities, and nongovernment structures but discourage participation in formal government structures. With regard to cooperation, conflicts have beneficial effects on within-group cooperation, collective problem solution, and cooperation with NGOs. However, they retard cooperation with formal government structures. The intensity of these effects is influenced by the location of the individuals as is shown by the results of SRDD. Alternatively, highly exposed areas exhibit comparatively higher changes in trust, participation, and cooperation as compared to the moderately and least affected areas.

THE ROLE OF DIVERGENT THINKING IN INTERPERSONAL TRUST DURING THE COVID-19 PANDEMIC: CREATIVE ASPECTS

Interpersonal trust relies on positive expectations about other people. Social psychology distinguishes ingroup (individuals share social identity, e.g., family) from outgroup trust (individuals do not share social identity, e.g., strangers). We conducted an experimental study to test if divergent thinking, which relies on an inclusive processing mode, differently affected ingroup and outgroup trust during the lockdown due to the COVID-19 pandemic. A sample of 114 healthy college students, with no prior or current COVID-19 infection (mean age = 23.66, sd = 2.53, 89% women) was recruited. Interpersonal trust was measured by three ingroup and three outgroup trust items. Divergent thinking was measured by the alternative uses task, which asked to find alternative uses for common objects. Divergent thinking was scored by two independent raters in terms of fluency and quality of ideas. To control for generalized anxiety and mood states, the generalized anxiety disorder scale and the Positive and Negative Affect Schedule were administered, respectively. To control for the inclusiveness of divergent thinking performance, the alternative uses task was administered using three types of instructions. Thus, the sample was divided in three groups of 38 participants according to the divergent thinking task instructions: “be-fluent: find as many different uses for the objects”, “be-creative: find creative uses for the objects”, and “be fluent and creative: find as many different and creative uses of the objects”. The hierarchical regression analyses showed that the quality, but not the quantity of divergent thinking positively predicted only outgroup trust, whereas the mood positively predicted ingroup trust. Divergent thinking task instructions did not affect interpersonal trust. Thus, in the context of the COVID-19 pandemic, the quality of divergent thinking supports only outgroup trust based on the inclusive processing mode, meaning that people showing high ability to produce uncommon, remote and clever ideas are more inclusive and by consequence more prone to trust strangers. Limitations and implications are discussed.

How Feeling Understood Predicts Trust and Willingness to Forgive in the Midst of Violent Intergroup Conflict: Longitudinal Evidence From Ukraine

How can intergroup trust and forgiveness be fostered in the face of violent, large-scale intergroup conflict? We addressed this challenge by testing the role of intergroup felt understanding—the extent to which outgroup members are perceived to understand ingroup perspectives—in predicting Ukrainian nationals’ inclinations to trust and forgive Russians for the conflict that has affected Ukraine since 2014. We did so using representative longitudinal data (N = 743; three time points) collected 6 months before Russia’s full-scale invasion. Pre-registered analysis of dynamic mediation models confirmed that increases over time in felt understanding predicted increases over time in perceived positive regard, which in turn predicted increased outgroup trust and forgiveness over time. A mini-multiverse analysis indicated that this pattern was also largely robust to varying time point specifications. The findings provide further evidence that the feeling of being understood may be a key psychological factor that enables reconciliation.

The impact of natural disasters on social capital: An analysis of ingroup and outgroup trust

Although conventional wisdom suggests that natural disasters tear down trust between people, this is not necessarily true for all forms of social trust. This study theoretically distinguishes between trust towards individuals within one's “ingroup” and trust towards individuals outside of the ingroup, or “outgroup.” I argue that the scarcity induced by natural disasters increases people's fear of and hostility towards outgroup members but simultaneously increases benevolence towards and willingness to cooperate with fellow ingroup members. Multilevel analysis of data for more than 150,000 individuals from 82 countries indicates that ingroup trust tends to increase after a disaster, whereas the effect on outgroup trust is less clear, with some non-robust evidence of a negative relationship. The results are not affected by reverse causality, but the impact of disasters on trust appears to be temporary. This paper underscores the importance of comprehending people's reactions to natural disasters, as a lack of knowledge in this area can result in poorly planned and executed responses, exacerbating the already damaging impact of these events.

On the relationship between green space and civic engagement: The roles of well-being, outgroup trust, and activity level.

Much research has been devoted to the positive effect of green space on prosociality, but little is known about its impact on civic engagement. It is also unclear how the effect takes place. This research fills the voids by regressing 2440 UScitizen's civic engagement on the vegetation density and park area in their neighborhoods. It further examines if the effect is due to changes in well-being, interpersonal trust, or activity level. Park area predicts higher civic engagement, which is mediated by higher trust in outgroups. However, the data is inconclusive about the effect of vegetation density and the well-being mechanism. In contrast to the activity hypothesis, the effect of parks on civic engagement is stronger in unsafe neighborhoods, suggesting that they are valuable resources to combat neighborhood problems. The results bring insights into how individuals and communities can benefit the most from green spaces in the neighborhood.

COVID-19 and Anti-Asian Racism in the U.S. through the Lens of Scapegoat and Social Attribution Theory

This study investigated the relationship between the use of China related names for COVID-19, a variety of COVID-19 information sources, and endorsement of conspiracy theory variables in the U.S. One hundred thirty-nine undergraduate students participated in an online survey in the U.S. Results indicated that the use of friends and families on social media and online, or former U.S. president Trump as a source of COVID-19 related information were the most important predictors of the level of endorsement of Chinese related conspiracy theory variables. Further, outgroup trust moderated the relationship between the use of Chinese related names for COVID-19 and endorsement of China related conspiracy theories.

Self-Reported Mental Health and Psychosocial Correlates during the COVID-19 Pandemic: Data from the General Population in Italy

The COVID-19 pandemic tremendously impacted people’s day-to-day activities and mental health. This article describes the dataset used to investigate the psychological impact of the first national lockdown on the general Italian population. For this purpose, an online survey was disseminated via Qualtrics between 1 April and 20 April 2020, to record various socio-demographic and psychological variables. The measures included both validated (namely, the Impact of the Event Scale-Revised, the Perceived Stress Scale, the nine-item Patient Health Questionnaire, the seven-item Generalized Anxiety Disorder scale, the Big Five Inventory 10-Item, and the Whiteley Index-7) and ad hoc questionnaires (nine items to investigate in-group and out-group trust). The final sample comprised 4081 participants (18–85 years old). The dataset could be helpful to other researchers in understanding the psychological impact of the COVID-19 pandemic and its related preventive and protective measures. Furthermore, the present data might help shed some light on the role of individual differences in response to traumatic events. Finally, this dataset can increase the knowledge in investigating psychological distress, health anxiety, and personality traits.

Individual differences in self-reported lie detection abilities.

Previous literature on lie detection abilities bears an interesting paradox. On the group level, people detect others' lies at guessing level. However, when asked to evaluate their own abilities, people report being able to detect lies (i.e., self-reported lie detection). Understanding this paradox is important because decisions which rely on credibility assessment and deception detection can have serious implications (e.g., trust in others, legal issues). In two online studies, we tested whether individual differences account for variance in self-reported lie detection abilities. We assessed personality traits (Big-Six personality traits, Dark Triad), empathy, emotional intelligence, cultural values, trust level, social desirability, and belief in one's own lie detection abilities. In both studies, mean self-reported lie detection abilities were above chance level. Then, lower out-group trust and higher social desirability levels predicted higher self-reported lie detection abilities. These results suggest that social trust and norms shape our beliefs about our own lie detection abilities.

Disentangling the effect of Trust on Bank Lending

This paper studies the effect of trust on bank lending using a sample of commercial banks in 34 countries around the world. We distinguish between two forms of trust: In-group trust, which we define as the trust in people we know, and Out-group trust, which we define as the trust in people we meet for the first time. We find that Out-group trust is positively and significantly associated with bank lending. A closer look shows that this effect only holds in countries with relatively lower levels of formal institutional and judicial development. As for In-group trust, we find that its influence on bank lending is dependent on the level of informal lending available in each country. Overall, this paper provides novel evidence on the importance of trust and the different mechanisms by which it influences bank lending around the world.

Trust game, survey trust, are they correlated? Evidence from China.

Trust Game and survey trust are the two most popular measurements in the field of trust research, but most studies conducted in developing countries have found low or even insignificant correlations between them, we therefore validated this phenomenon in the cultural context of the largest developing country, China. Within-country differences can be of the same magnitude as the between country differences, especially in a culturally diverse China. Thus, we focus on comparing the characteristics of trust in the South and North regions of China. Through zero-order correlation and hierarchical regression analysis, our findings are consistent with those of numerous developing countries: Trust Game is lowly correlated with in-group trust survey and not with out-group trust survey. On the other hand, we found that Chinese individuals exhibit a distinct pattern of in-group trust, and there is no fundamental difference in the characteristics of trust between the South and the North.