Bonding and Bridging Social Capital and Economic Growth

S. Beugelsdijk, J.A. Smulders

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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.
Original languageEnglish
Place of PublicationTilburg
PublisherMacroeconomics
Number of pages39
Volume2009-27
Publication statusPublished - 2009

Publication series

NameCentER Discussion Paper
Volume2009-27

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Keywords

  • social capital
  • economic growth
  • Europe
  • regions

Cite this

Beugelsdijk, S., & Smulders, J. A. (2009). Bonding and Bridging Social Capital and Economic Growth. (CentER Discussion Paper; Vol. 2009-27). Macroeconomics.