Social capital and economic growth: empirical investigations on the transmission channels

Authors: Boulila, Ghazi¹; Bousrih, Lobna¹; Trabelsi, Mohamed²

Source: International Economic Journal, Volume 22, Number 3, September 2008 , pp. 399-417(19)

Publisher: Routledge, part of the Taylor & Francis Group

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Abstract:

This paper explores the possible transmission channels of social capital to economic growth for a sample of some developed and developing countries during the period 1980-2000, using a simultaneous equation model. The main results of this paper are, first, the level of trust as a measure of social capital and growth are significantly and positively correlated; second, a high level of trust also has an indirect effect on economic activity through its effect on institutional development; third, such results are found to be robust statistically with the extreme bound analysis (EBA). It corroborates the fact that an improvement of the social infrastructure with high levels of trust and cooperation between individuals not only has a direct but also an indirect effect on economic growth through the development of institutions in the economy.

Keywords: social capital; institution and economic growth

Document Type: Research article

DOI: http://dx.doi.org/10.1080/10168730802287994

Affiliations: 1: Ecole Superieure des Sciences Economiques et Commerciales (ESSEC), Tunis, Tunisia 2: Institut des Hautes Etudes Commerciales de Carthage (IHEC), Tunis, Tunisia

Publication date: 2008-09-01