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Social capital and growth: causal evidence from Italian municipalities

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  • Corrado Andini
  • Monica Andini

Abstract

The macroeconomic effects of social capital are typically studied using data at country, region or, at most, province level of aggregation. However, social capital is defined by connections among agents who know each other and its effects, if any, should be detected at a more detailed level of spatial aggregation. To the best of our knowledge, this is the first study using longitudinal municipality-level data to investigate the causal link between social capital and growth. We extend earlier research by accounting for the endogeneity of all the covariates as well as unobserved heterogeneity. The evidence suggests that social capital has been a source of growth inequality in Italy between 1951 and 2001. The causal effect of social capital on growth is positive, on average, and stronger in the Centre-North of Italy. In addition, it was higher in the 1950s. The paper also presents local estimates of the growth return to social capital, which are of interest for specific sub-populations of municipalities.

Suggested Citation

  • Corrado Andini & Monica Andini, 2019. "Social capital and growth: causal evidence from Italian municipalities," Journal of Economic Geography, Oxford University Press, vol. 19(3), pages 619-653.
    • Handle: RePEc:oup:jecgeo:v:19:y:2019:i:3:p:619-653.
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    File URL: http://hdl.handle.net/10.1093/jeg/lby024
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    Cited by:

    1. Mauro Caselli & Paolo Falco, 2019. "Your Vote is (no) Secret! How Low Voter Density Harms Voter Anonymity and Biases Elections in Italy," EconPol Working Paper 26, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    2. Xue, Xindong & Reed, W. Robert & Menclova, Andrea, 2020. "Social capital and health: a meta-analysis," Journal of Health Economics, Elsevier, vol. 72(C).

    More about this item

    Keywords

    Social capital; growth; Italy; municipality;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • 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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