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Bridging and Bonding Social Capital: which type is good for economic growth?

  • Sjoerd Beugelsdijk

    ()

  • Sjak Smulders

In this paper we develop a model of growth and social capital, and test it using data from the European Value Survey (EVS). Following Putnam’s distinction between bonding and bridging social capital, we model social capital as participation in two types of social networks: first, closed networks of family and friends, and, second, open networks that bridge different communities. Agents have a preference for social interaction, which they trade off against material well-being. Participation in both social networks is time-consuming and comes at the cost of participation in the formal economic sphere and working time. Through this channel, higher levels of social capital may crowd out economic growth. In addition, participation in intercommunity networks reduces incentives for rent seeking and cheating. Through this channel, higher level of bridging social capital may enhance economic growth. Testing the model, we find that regional differences in materialistic attitudes and the value attached to family life significantly reduce the participation in open networks and that this in turn reduces regional output growth in Europe.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa03p517.

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Date of creation: Aug 2003
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Handle: RePEc:wiw:wiwrsa:ersa03p517
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  1. Quah, Danny T., 1996. "Regional convergence clusters across Europe," European Economic Review, Elsevier, vol. 40(3-5), pages 951-958, April.
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  13. Richins, Marsha L & Dawson, Scott, 1992. " A Consumer Values Orientation for Materialism and Its Measurement: Scale Development and Validation," Journal of Consumer Research, University of Chicago Press, vol. 19(3), pages 303-16, December.
  14. Knack, Stephen & Keefer, Philip, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1251-88, November.
  15. Jan Fagerberg & Bart Verspagen, 1996. "Heading for Divergence? Regional Growth in Europe Reconsidered," Journal of Common Market Studies, Wiley Blackwell, vol. 34(3), pages 431-448, 09.
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  18. Belk, Russell W, 1985. " Materialism: Trait Aspects of Living in the Material World," Journal of Consumer Research, University of Chicago Press, vol. 12(3), pages 265-80, December.
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