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The Importance Of Social Capital In Colombian Rural Agro-Enterprises

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  • Johnson, Nancy L.
  • Suarez, Ruth
  • Lundy, Mark

Abstract

This paper characterizes and measures the contribution of social capital to the performance of 50 agro-enterprises in Colombia. Using qualitative analysis we document the functions that social capital performs within firms. To estimate social capital's contribution to firm structure and performance, quantitative indicators of firm-level use of social capital are developed based on the number and strength of external relationships that firms maintain. Econometric analysis finds that firm-level returns to relationships are positive and higher than to physical or human capital. The results suggests that while firms can increase their economic performance by investing in social capital, ameliorating the effects of the market failures that lead to use of social relations for business purposes could also improve both equity and efficiency.

Suggested Citation

  • Johnson, Nancy L. & Suarez, Ruth & Lundy, Mark, 2003. "The Importance Of Social Capital In Colombian Rural Agro-Enterprises," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25917, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae03:25917
    DOI: 10.22004/ag.econ.25917
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    References listed on IDEAS

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    1. John F. Helliwell & Robert D. Putnam, 1995. "Economic Growth and Social Capital in Italy," Eastern Economic Journal, Eastern Economic Association, vol. 21(3), pages 295-307, Summer.
    2. Durlauf, Steven N. & Fafchamps, Marcel, 2005. "Social Capital," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 26, pages 1639-1699, Elsevier.
    3. John F. Helliwell, 1996. "Do Borders Matter for Social Capital? Economic Growth and Civic Culture in U.S. States and Canadian Provinces," NBER Working Papers 5863, National Bureau of Economic Research, Inc.
    4. Barr, Abigail, 2000. "Social Capital and Technical Information Flows in the Ghanaian Manufacturing Sector," Oxford Economic Papers, Oxford University Press, vol. 52(3), pages 539-559, July.
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    Cited by:

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    2. Shaoling Fu & Hua Liu & Kim Hua Tan & Yuanzhu Zhan & Yalan Ding & Wene Qi, 2018. "How Social Capital Affects the Quality Performance of Agricultural Products: Evidence from a Binary Perspective of China," Sustainability, MDPI, vol. 10(9), pages 1-15, August.

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