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Does Social Capital Create Trust? Evidence from a Community of Entrepreneurs

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  • Fabio Sabatini

    (University of Siena)

Abstract

Which kind of social capital fosters the diffusion of development-oriented trust? This paper carries out an empirical investigation into the causal relationships connecting four types of social capital (i.e. bonding, bridging, linking, and corporate), and different forms of trust (knowledge-based trust, social trust, trust towards public services and political institutions), in a community of entrepreneurs located in the Italian industrial district of the Tuscia. Our results suggest that the main factors fostering the diffusion of social trust among entrepreneurs are the perception that the local community is a safe place, and the establishment of corporate ties through professional associations. Trust in people is positively and significantly correlated also to higher levels of satisfaction and confidence in public services. Participation in voluntary organizations does not appear to increase trust in people. Rather, we find evidence of the other way round: interpersonal trust seems to encourage civic engagement.

Suggested Citation

  • Fabio Sabatini, 2009. "Does Social Capital Create Trust? Evidence from a Community of Entrepreneurs," Working Papers 2009.44, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2009.44
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    References listed on IDEAS

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    1. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
    2. Fabio Sabatini, 2008. "Does social capital improve labour productivity in Small and Medium Enterprises?," International Journal of Management and Decision Making, Inderscience Enterprises Ltd, vol. 9(5), pages 454-480.
    3. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1251-1288.
    4. Sabatini, Fabio, 2009. "Social capital as social networks: A new framework for measurement and an empirical analysis of its determinants and consequences," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(3), pages 429-442, June.
    5. Oguzhan Dincer & Eric Uslaner, 2010. "Trust and growth," Public Choice, Springer, vol. 142(1), pages 59-67, January.
    6. Antoci, Angelo & Sacco, Pier Luigi & Vanin, Paolo, 2007. "Social capital accumulation and the evolution of social participation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(1), pages 128-143, February.
    7. Alessia Amighini & Roberta Rabellotti, 2004. "How do Italian footwear industrial districts face globalization?," European Planning Studies, Taylor & Francis Journals, vol. 14(4), pages 485-502, November.
    8. Paola Bertolini & Enrico Giovannetti, 2006. "Industrial districts and internationalization: the case of the agri-food industry in Modena, Italy," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 18(4), pages 279-304, July.
    9. Sabatini Fabio, 2007. "The empirics of social capital and economic development: A critical perspective," wp.comunite 0031, Department of Communication, University of Teramo.
    10. Fabio, Sabatini, 2005. "The empirics of social capital and economic development: a critical perspective," MPRA Paper 2366, University Library of Munich, Germany, revised Mar 2007.
    11. Fabio Sabatini, 2008. "Social Capital and the Quality of Economic Development," Kyklos, Wiley Blackwell, vol. 61(3), pages 466-499, August.
    12. Durlauf,S.N., 1999. "The case "against" social capital," Working papers 29, Wisconsin Madison - Social Systems.
    13. Fabio Sabatini, 2006. "The Empirics of Social Capital and Economic Development: A Critical Perspective," Working Papers 2006.15, Fondazione Eni Enrico Mattei.
    14. Foley, Michael W. & Edwards, Bob, 1999. "Is It Time to Disinvest in Social Capital?," Journal of Public Policy, Cambridge University Press, vol. 19(2), pages 141-173, May.
    15. Coates, Dennis & Heckelman, Jac C, 2003. "Interest Groups and Investment: A Further Test of the Olson Hypothesis," Public Choice, Springer, vol. 117(3-4), pages 333-340, December.
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    17. Fabio Sabatini, 2006. "Social Capital and Labour Productivity in Italy," Working Papers 2006.30, Fondazione Eni Enrico Mattei.
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    Cited by:

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    2. Sytske Groenewald & Erwin Bulte, 2013. "Trust and livelihood adaptation: evidence from rural Mexico," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 30(1), pages 41-55, March.

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    More about this item

    Keywords

    Trust; Social capital; Safety; Professional associations; Entrepreneurship; Corporate ties; Group and Interpersonal Processes; Social Perception and Cognition;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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