Social Capital and Economic Performance: A Meta-analysis of 65 Studies

Abstract

This paper summarizes 15 years of empirical research at various spatial levels on social capital and economic performance. On the firm level, results are unambiguous: there is strong evidence of the impact of social capital on firms' performance. However, the results become less clear for spatial units with a large number of anonymous actors. The contradictory results of studies on national and regional levels can be explained in part by insufficient measures of the main component parts of social capital: social networks and the norms and values distributed among them. To develop measures for values like creativity, entrepreneurship and tolerance, and to find better measures for social networks, are the main challenges to future research.

Notes

This approach is not a single type of method or analysis but “a set of methods: a methodology for the systematic combination of information from several different sources … It provides researchers with methods to combine the outcomes of different studies and analyse the results to investigate potential differences between countries or cultures” (De Leeuw & Hox, 2003, p. 329).

Taking the majority of European countries, it is quite clear that the countries with high associational involvement also have higher levels of economic development (Adam et al., 2005). For the most prosperous countries, like the Scandinavian countries and the Netherlands, we find a positive correlation.

See, e.g. Putnam (1993, 2000), OECD (2001), Westlund (2006).

Here it should be recognized that certain studies have separated “Putnam” (public interest) associations and “Olson” (rent-seeking) associations in their analyses.

See Lyon (2005).

However, arguments have been raised saying that too much trust between people decreases the competition necessary to encourage economic growth (Roth & Schüler, 2006).

Here it might be necessary to distinguish between different types of organizations (see note 4).

Cf. Giddens' (1979, 1984) structuration theory.

This problem would deserve an inquiry of its own. However, arguments for the country-interpretation include a common culture, government, media and news reporting.

A possible interpretation is that the regional disparities of Italy in some aspects are so significant that they function like differences between countries.

However, it should be taken into account that more and diverse indicators are utilized in the more transparent context where some experimental methods are viable (using experimental and control groups). We have here the problem of comparability, for instance: we can confirm our thesis that firm X is rich with social capital and therefore more efficient only if we have another (control) firm Y (or by showing that firm X was in the past poor of social capital, but with investment in social capital became more economically successful).

The interconnectedness of networks and values which is reflected in the example of “Putnam” vs. “Olson” organizations also indicates a potential to measure the relative strength of various values by the size of organizations representing such values.