The role of social capital in economic performance across European regions

Abstract

In recent decades, there has been increasing interest in analysing social capital. However, the analysis is commonly conducted on the country scale, hiding the regional dimension and, consequently, neglecting regional disparities. In this work, we investigate the diffusion of social capital across European regions, defining the different aspects through objective measurements as well as personal opinions and values. At the same time, the analysis also focuses on the effects that social capital has on economic performance, especially on gross domestic product per capita, underlining the relevant impacts. At the end, in order to highlight the stock of social capital in the European Union, particularly in 194 regions in 20 European countries in 2014, a composite index is developed to better evaluate the spread. More in detail, the variables defining social capital are summarized using the Mazziotta-Pareto method. The results of the analysis show the positive impact of social capital on economic growth, mainly due to the development of trust, collaboration, and cohesion, which is also decisive for innovation. Moreover, the study exhibits remarkable differences among regions, even within countries. This suggests that region-specific policies could be more effective than country-specific policies.