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Firm-level productivity growth returns of social capital: Evidence from Western Europe

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  • Roberto Ganau
  • Andres Rodriguez-Pose

Abstract

We analyse the firm-level labour productivity growth returns of social capital —defined as a synthetic measure of ‘generalised trust’, ‘active participation’, and ‘social norms’— using a large sample of manufacturing firms in France, Germany, Italy, Portugal, and Spain. We find that firms’ labour productivity growth is higher in areas with a better social capital endowment. The positive returns of social capital are, nevertheless, unevenly distributed across firms, with smaller, less productive, less capital-endowed, and low-tech firms benefitting the most from operating in strong social capital ecosystems.

Suggested Citation

  • Roberto Ganau & Andres Rodriguez-Pose, 2023. "Firm-level productivity growth returns of social capital: Evidence from Western Europe," Papers in Evolutionary Economic Geography (PEEG) 2305, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Feb 2023.
    • Handle: RePEc:egu:wpaper:2305
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    More about this item

    Keywords

    Firm labour productivity growth; Social capital; Manufacturing industry; Western Europe.;
    All these keywords.

    JEL classification:

    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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