| Summary: | 碩士 === 國立政治大學 === 國家發展研究所 === 105 === Cash transfers and in-kind transfers are the most common methods of aid in developing countries. Because “trust” plays an important role in economic development, this research utilizes data collected from World Bank’s randomized experiment in Ghana: 2008-2010 “Microenterprise Growth and the Flypaper Effect”. This paper builds on the foundation of Fafchamps et al. (2014) and considers trust-related variables. I use the OLS method to explore the impact of trust relationships on Microenterprise’s profits in Ghana and the differences between firms receiving cash transfers and in-kind transfers. The two-stage least squares (2SLS) method using religious majority and household size as instrument variables is also implemented to avoid endogeneity issues. The findings show that after we consider the trust relationships, microenterprise owners who received in-kind transfers received statistically significant higher profits than the cash transfers group and the control group, and the treatment effects of the cash transfers become smaller or even insignificant. The only exception is that in OLS regression when all types of trust variables are controlled, the cash treatment has a positive and statistically significant effect on profits (will increase 15.599 GhC per month). This result is larger than the result in Fafchamps et al. (2014) (increase by 14.503 GhC per month), and the difference between cash and in-kind shrinks. Therefore, this paper considered that “trust” is related to the profit effects of receiving transfers.
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