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Question 5: Describe the relationship between trustworthiness and investment. Based on the data we examined in class, are the

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In any scenario, trustworthiness is always positively correlated with the investment. We can consider it as a principal and agent angle. if the management of an organization which is agent is acting diligently for the maximizing of shareholder value without using deceitful tactics such as bribing or labor as well environment exploitation then it is scoring on good governance.
Maintaining product quality and helping communities through corporate social responsibility are some some steps which bolsters management trustworthiness. This indicates that the organization is looking for long term goals and investors definitely gives preference for such organizations.

Similar is the case in terms of country. If that country has good government, law & order situation with lower bribing and healthy social structure then investment flows into that country.

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