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Social capital and growth: causal evidence from Italian municipalities

Author

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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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    Citations

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    Cited by:

    1. Xindong Xue & W. Robert Reed & Robbie C.M. van Aert, 2022. "Social Capital and Economic Growth: A Meta-Analysis," Working Papers in Economics 22/20, University of Canterbury, Department of Economics and Finance.
    2. 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.
    3. Roberto Ganau & Andrés Rodríguez‐Pose, 2023. "Firm‐level productivity growth returns of social capital: Evidence from Western Europe," Journal of Regional Science, Wiley Blackwell, vol. 63(3), pages 529-551, June.
    4. Diemer, Andreas, 2023. "Divided we fall? The effect of manufacturing decline on the social capital of US communities," LSE Research Online Documents on Economics 120355, London School of Economics and Political Science, LSE Library.
    5. Pilatin Abdulmuttalip & Hacıimamoğlu Tunahan, 2023. "The relationship between social capital and economic growth on a provincial and regional basis," Economics and Business Review, Sciendo, vol. 9(3), pages 153-180, October.
    6. Ganau, Roberto & Rodríguez-Pose, Andrés, 2023. "Firm-level productivity growth returns of social capital: Evidence from Western Europe," CEPR Discussion Papers 17979, C.E.P.R. Discussion Papers.
    7. Xue, Xindong & Reed, W. Robert & Menclova, Andrea, 2020. "Social capital and health: a meta-analysis," Journal of Health Economics, Elsevier, vol. 72(C).
    8. Mauro, Luciano & Pigliaru, Francesco & Carmeci, Gaetano, 2023. "Decentralization, social capital, and regional growth: The case of the Italian North-South divide," European Journal of Political Economy, Elsevier, vol. 78(C).
    9. Cristian Barra & Anna Papaccio, 2024. "Does Regulatory Quality Reduce Informal Economy? A Theoretical and Empirical Framework," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 172(2), pages 543-567, March.

    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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