Bonding and Bridging Social Capital and Economic Growth

S. Beugelsdijk and J.A. Smulders
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J.A. Smulders: Tilburg University, Center for Economic Research

No 2009-27, Discussion Paper from Tilburg University, Center for Economic Research

Abstract: In this paper we develop a formal model of economic growth and two types of social capital. Following extant literature, 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. Higher levels of social capital may crowd out economic growth through a reduction of working time. At the same time, participation in intercommunity networks reduces incentives for rent seeking and cheating, promoting economic growth. We test our hypotheses in a sample of European regions using unique data from the European Value Studies (EVS). Our findings show that it is important to distinguish between the nature of the social interaction.

JEL-codes: O40 R11 Z13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-eec, nep-fdg, nep-soc and nep-ure
Date: 2009
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Persistent link: http://EconPapers.repec.org/RePEc:dgr:kubcen:200927

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