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Does social capital matter for European regional growth?

Author

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  • Forte, Anabel
  • Peiró-Palomino, Jesús
  • Tortosa-Ausina, Emili

Abstract

This paper analyzes the role of different elements of social capital in economic growth for a sample of 85 European regions during the period 1995–2008. Despite the remarkable progress that social capital and European regional economic growth literatures have experienced over the last two decades, initiatives combining the two are few, and entirely yet to come for the post-1990s period. Recent improvements in data availability allow this gap in the literature to be closed, since they enable the researcher to consider the traditionally disregarded Eastern and Central European (ECE) regions. This is particularly interesting, as they are all transition economies that recently joined the European Union, with relatively low levels of social capital. On the methodological side, we follow the Bayesian paradigm, which enables us to make direct inferences on the parameters to be estimated and deal with parameter uncertainty, leading to a deeper understanding of the relationships being investigated. In particular, we analyze three indicators of social capital, namely social trust, associational activities and social norms. Results suggest that the two former might have some implications for regional growth while social norms are a weaker predictor for growth.

Suggested Citation

  • Forte, Anabel & Peiró-Palomino, Jesús & Tortosa-Ausina, Emili, 2015. "Does social capital matter for European regional growth?," European Economic Review, Elsevier, vol. 77(C), pages 47-64.
  • Handle: RePEc:eee:eecrev:v:77:y:2015:i:c:p:47-64
    DOI: 10.1016/j.euroecorev.2015.03.013
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    References listed on IDEAS

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    1. Jesús Crespo Cuaresma & Martin Feldkircher, 2013. "Spatial Filtering, Model Uncertainty And The Speed Of Income Convergence In Europe," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(4), pages 720-741, June.
    2. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
    3. Steven N. Durlauf & Andros Kourtellos & Chih Ming Tan, 2012. "Is God in the details? A reexamination of the role of religion in economic growth," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 27(7), pages 1059-1075, November.
    4. Horváth, Roman, 2013. "Does trust promote growth?," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 777-788.
    5. Marcel Fafchamps, 2006. "Development and social capital," Journal of Development Studies, Taylor & Francis Journals, vol. 42(7), pages 1180-1198.
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    Citations

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    Cited by:

    1. Jetter, Michael & Kristoffersen, Ingebjørg, 2017. "Financial Shocks and the Erosion of Interpersonal Trust: Evidence from Longitudinal Data," IZA Discussion Papers 11204, Institute for the Study of Labor (IZA).
    2. Roberto Antonietti & Ron Boschma, 2018. "Social capital, resilience and regional diversification in Italy," Papers in Evolutionary Economic Geography (PEEG) 1804, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2018.
    3. Yann Algan & Pierre Cahuc, 2010. "Inherited Trust and Growth," American Economic Review, American Economic Association, vol. 100(5), pages 2060-2092, December.
    4. Jesús Peiró-Palomino, 2016. "Social Capital and Economic Growth in Europe: Nonlinear Trends and Heterogeneous Regional Effects," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(5), pages 717-751, October.
    5. Jesús Peiró-Palomino, 2016. "European regional convergence revisited: the role of intangible assets," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 57(1), pages 165-194, July.
    6. Jordaan, Jacob A. & Dima, Bogdan & Goleț, Ionuț, 2016. "Do societal values influence financial development? New evidence on the effects of post materialism and institutions on stock markets," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PA), pages 197-216.
    7. Masuch, Klaus & Anderton, Robert & Setzer, Ralph & Benalal, Nicholai, 2018. "Structural policies in the euro area," Occasional Paper Series 210, European Central Bank.
    8. Stephany, Fabian & Braesemann, Fabian, 2017. "Bonds and bridges, and between: An empirical analysis of group-based trust," Working Papers 09, Agenda Austria.

    More about this item

    Keywords

    Bayesian inference; Economic growth; European regions; Social capital;

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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