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Social capital, resilience and regional diversification in Italy

Roberto Antonietti () and Ron Boschma ()

No 1804, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: There is increasing interest in the question how institutions affect regional diversification, especially in times of economic crisis. This paper investigates the role of social capital for the entry of new industries and the exits of existing industries in Italian provinces during the 2004-2010 period. Our results show that bridging social capital in a region positively contributes to the entry of new industries, especially when they are unrelated to existing specializations in the region. Diversification in regions (especially more unrelated diversification) tends to rely on bridging, not on bonding social capital. We also find that bridging social capital loses its impact on regional diversification during the crisis. Bonding, not bridging social capital, appears to make regions resilient in times of crisis, by reducing the probability of exit, especially in industries unrelated to existing specializations in regions. While bridging social capital has a negative effect on exit in times of prosperity, it shows no such effect anymore during the crisis period. Our findings suggest that bridging social capital loses its supportive role in times of crisis.

Keywords: bonding social capital; bridging social capital; regional diversification; resilience; economic crisis; Italy (search for similar items in EconPapers)
JEL-codes: R11 O14 D02 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-geo, nep-soc and nep-ure
Date: 2018-01, Revised 2018-01
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