TY  - RPRT
        AU  - Munoz-Herrera, Manuel
AU  - Reuben, Ernesto
        TI  - Business Culture: The Role of Personal and Impersonal Business Relationships on Market Efficiency
        PY  - 2019/Jun/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 12398
        UR  - https://www.iza.org/index.php/publications/dp12398
        AB  - 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. 
        KW  - trust
KW  - contracts
KW  - competition
KW  - business culture
KW  - communication
KW  - social ties
        ER  -