Does Social Capital Matter for European Regional Growth?
Universitat Jaume I Department of Economics Working Paper No. 2013/02
30 Pages Posted: 23 Feb 2013
Date Written: February 1, 2013
This article analyzes the role of different elements of social capital in economic growth for a sample of 85 European regions during the period 1995-2008. Much has been said about social capital in the last two decades, but studies for the European regional context are scant, and those analyzing periods after the nineties are nonexistent. The improvements in data availability allow us to consider the traditionally disregarded Central and Eastern European regions. This is especially interesting, since they are all transition economies that recently joined to the European Union and show remarkably low levels of social capital. Additionally, we follow the Bayesian paradigm, which not only allows us to make direct inference on the parameters to be estimated, but also deals with parameter uncertainty, leading to a deeper understanding of the data. Contrary to other contributions for the European context, results suggest, among other findings, that trust and social norms might have the major implications for regional growth, whereas the role of active participation in groups does not seem to be so well defined.
Keywords: social capital, economic growth, European regions, Bayesian inference
JEL Classification: C15, R10, Z13
Suggested Citation: Suggested Citation