Social Capital and Economic Development: PLS-SEM Model

Mateusz Borkowski

Gospodarka Narodowa. The Polish Journal of Economics, 2023, issue 2, 11-27

Abstract: The aim of this paper is to measure social capital and determine its effect on economic development across thirty five European economies from 2017 to 2020. Partial least squares structural equation modelling (PLS-SEM) was applied to measure and identify the relationship between latent (directly unobservable) variables. Social trust was found to be more strongly determined by interpersonal trust than by trust in organisations. Furthermore, social trust was also found to be the most important component of the overall measure of social capital. The latent variable representing social interaction and attitudes was found to be less important in the formation of social capital. Finally, a strong positive and statistically significant relationship was found between social capital and economic development.

Keywords: social capital; PLS-SEM; institutions; economic development (search for similar items in EconPapers)
JEL-codes: C31 C50 O11 O43 Z13 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:sgh:gosnar:y:2023:i:2:p:11-27

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