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Social capital and innovation: an empirical analysis in the context of European regions

  • Jose M Barrutia
  • Carmen Echebarria
  • Ainhize Gilsanz

Although conceptual support for the relevance of social capital as an antecedent of innovation has received much theoretical attention over recent years, measurement and quantitative evidence are scarce, particularly in regional contexts. Available empirical research referring to different units of analysis (individuals, organizations, and so on) supports, in general terms, a linear positive relationship among some components of social capital and innovation. Yet some studies also offer controversial results by finding non-significant, negative, diminishing returns and quadratic relationships. Building on the social network theory of innovation, this paper seeks to contribute some insights to this stream of research by empirically testing the impact of social capital on innovation in 54 NUTS1 European regions. Our results show that the social capital-innovation relationship has an inverted U-shape, which is consistent with recent research that suggests that some sub-constructs of social capital, such as tie strength, involve maintenance and opportunity costs and that social capital has positive effects but has also its limits.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa10p1347.

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Date of creation: Sep 2011
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Handle: RePEc:wiw:wiwrsa:ersa10p1347
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  1. 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.
  2. Kevin Morgan, 1997. "The Learning Region: Institutions, Innovation and Regional Renewal," Regional Studies, Taylor & Francis Journals, vol. 31(5), pages 491-503.
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  8. Sjoerd Beugelsdijk & Sjak Smulders, 2003. "Bridging and Bonding Social Capital: which type is good for economic growth?," ERSA conference papers ersa03p517, European Regional Science Association.
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  10. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
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  12. Lisa De Propris, 2005. "Mapping local production systems in the UK: Methodology and application," Regional Studies, Taylor & Francis Journals, vol. 39(2), pages 197-211.
  13. Simon Collinson, 2000. "Knowlege networks for innovation in small Scottish software firms," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 12(3), pages 217-244, July.
  14. José M. Barrutia & Carmen Echebarria, 2007. "A New Internet Driven Internationalisation Framework," The Service Industries Journal, Taylor & Francis Journals, vol. 27(7), pages 923-946, October.
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