%0 Report
        %A Munoz-Herrera, Manuel
%A Reuben, Ernesto
        %T Business Culture: The Role of Personal and Impersonal Business Relationships on Market Efficiency
        %D 2019
        %8 2019 Jun
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 12398
        %U https://www.iza.org/index.php/publications/dp12398
        %X In this paper, we study the effects of business culture on market efficiency. We exogenously vary the type of business culture between business-is-business cultures, which consist on impersonal relationships where financial matters are paramount, and business-is-family cultures, which comprise of cohesive personal relationships where financial matters and personal attachments are intertwined. We use a laboratory experiment to assess the effect of business cultures in environments with different degrees of contract enforceability and competition. Our main results indicate that business-is-family cultures are more effective when contracts are unverifiable because they help market participants overcome problems of trust. On the other hand, we find that business-is-business cultures are more effective in competitive settings because they facilitate the severance of ties with unproductive partners. 
        %K trust
%K contracts
%K competition
%K business culture
%K communication
%K social ties