Does Social Capital Have an Effect on Industry Production in G7 Countries? Causality Analysis

Oktay KIZILKAYA, Murat ÇETİNKAYA, Emrah SOFUOĞLU

Abstract


Abstract. The relationship between social capital and economic growth has become an attractive research area in the literature recently. In this context, this paper examines the relationship between social capital indicators and industry production in the period of 2006-2014 with monthly data for the G7 countries. For empirical analysis, panel causality analysis method developed by Dumitrescu & Hurlin (2012) was used. Results indicate that there is a bidirectional relationship between social capital indicators and industry production. These findings support feedback hypothesis in the context of social capital and economic growth in the G7 countries.

Keywords. Social capital, Industry production, Economic growth, Panel causality, G7 Countries.

JEL. F63, J24, O47.

Keywords


Social capital; Industry production; Economic growth; Panel causality; G7 Countries.

Full Text:


References


Aguilera, J.C. (2016). Social capital and economic growth, LUP Student Papers, 1-29.

Akçay, S. (2005). Sosyal sermaye ve kalkınma, in M. Kar, & S. Taban, (Eds.), İktisadi Kalkınmada Sosyal, Kültürel ve Siyasal Faktörlerin Rolü, (pp.199-220), Ekin Kitabevi, Bursa.

Almond, G.A., & Verba, S. (1963). The Civic Culture: Political Attitudes and Democracy in Five Nations, Newbury Park, California: Sage.

Annen, K. (2003). Social capital, inclusive networks, and economic performance, Journal of Economic Behavior & Organization, 50(4), 449-463. doi. 10.1016/S0167-2681(02)00035-5

Baliamoune-Lutz, M. (2005). Institutions, social capital, and economic development in Africa: an empirical study, International Centre for Economic Research Working Paper Series, (18), No.2007-05.

Beugelsdijk, S., & Van Schaik, T. (2005). Social capital and growth in European regions: an empirical test, European Journal of Political Economy, 21(2), 301-324. doi. 10.1016/j.ejpoleco.2004.07.004

Casey, T. (2004). Social capital and regional economies in Britain, Political Studies, 52(1), 96-117. doi. 10.1111/j.1467-9248.2004.00466.x

Coleman, J.S. (1988). Social capital in the creation of human capital, American Journal of Sociology, 1988. 95-120.

Coleman, J.S. (1990). Foundations of Social Theory. Cambridge, Harvard University Press.

Coleman, J.S. (1994). Foundations of Social Theory, Harvard University Press.

Dearmon, J., & Grier, K. (2009). Trust and development, Journal of Economic Behavior & Organization, 71(2), 210-220. doi. 10.1016/j.jebo.2009.02.011

Dincer, O.C., & Uslaner, E.M. (2010). Trust and growth, Public Choice, 142(1-2), 59-67. doi. 10.1007/s11127-009-9473-4

Dinda, S. (2008). Social capital in the creation of human capital and economic growth: A productive consumption approach, The Journal of Socio-Economics, 37(5), 2020-2033. doi. 10.1016/j.socec.2007.06.014

Dumitrescu, E.I., & Hurlin, C. (2012). Testing for Granger non-causality in heterogeneous panels, Economic Modelling, 29(4), 1450-1460. doi. 10.1016/j.econmod.2012.02.014

Easterly, W., & Levine, R. (1997). Africa’s growth tragedy: Policies and ethnic divisions, Quarterly Journal of Economics, 112(4), 1203–50. doi. 10.1162/003355300555466

Feki, C., & Chtourou, N. (2014). Social capital and economic growth: empirical analysis of panel data, International Journal of Innovation and Scientific Research, 2(1),164-176.

Fukuyama, F. (1995a). Trust: The Social Virtues and the Creation of Prosperity, The Free Press, New York.

Fukuyama, F. (1995b). Social capital and the global economy, Foreign Affairs 74, 89– 103.

Fukuyama, F. (1999). The Great Disruption, London: Profile Books.

Fukuyama, F. (2002). Social capital and development: The coming agenda, SAIS Review, 22, 23-37. doi. 10.1353/sais.2002.0009

Hanifan, L.J. (1916). The rural school community center, Annals of the American Academy of Political and Social Science, 67,130-138.

Helliwell, J.F. (1996). Economic growth and social capital in Asia, National Bureau of Economic Research, No.w5470, 1-21. doi. 10.3386/w5470

Helliwell, J., & Putnam, R. (1995). Economic growth and social capital in Italy, Eastern Economic Journal, 21(3), 295–307.

Hjerppe, R. (1998). Social capital and economic growth, Government Institute for Economic Research, 1-26

Im, K.S., Pesaran, M.H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels, Journal of Econometrics, 115(1), 53-74. doi. 10.1016/S0304-4076(03)00092-7

Iyer, S., Kitson, M., & Toh, B. (2005). Social capital, economic growth and regional development, Regional Studies, 39(8), 1015-1040. doi. 10.1080/00343400500327943

Karagül, M., & Akçay, S. (2002). Ekonomik büyüme ve sosyal sermaye: Ampirik bir kanıt, İktisat İşletme ve Finans, 17(198), 82-90.

Knack, S. & Keefer, P. (1995). Institutions and economic performance: Cross-country tests using alternative institutional measures, Economics and Politics, 7, 207–227.

Knack, S., & Keefer, P. (1997). Does social capital have an economic payoff? A cross-country investigation, Quarterly Journal of Economics, 112(4), 1251-1288. doi. 10.1162/003355300555475

Knack, S. (1999). Social capital, growth, and poverty: A survey of cross-country evidence, Social Capital Initiative Working Paper, 7, 1-48.

Knack, S. (2002). The role of social capital in development: An empirical assessment, in C. Grootaert, T.V. Bastelaer & R. Putnam, (Eds.), Social Capital, Growth, and Poverty: A Survey of Cross-Country Evidence, (pp.42-82), Thr World Bank.

Kormendi, R.C. & Meguire, P.G. (1985). Macroeconomic determinants of growth, Journal of Monetary Economics, 16(2), 141–63. doi. 10.1016/0304-3932(85)90027-3

La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R.W. (1997). Trust in large organisations, American Economic Review Papers and Proceedings, 87(2), 33-38.

Levin, A., Lin, C.F., & Chu, C.S.J. (2002). Unit root tests in panel data: Asymptotic and finite-sample properties, Journal of Econometrics. 108(1), 1-24. doi. 10.1016/S0304-4076(01)00098-7

Mauro, P. (1995). Corruption and Growth, Quarterly Journal of Economics, 110(3), 681–712. doi. 10.2307/2946696

Neira, I., Vázquez, E., & Portela, M. (2009). An empirical analysis of social capital and economic growth in Europe (1980–2000),Social Indicators Research, 92(1), 111-129. doi. 10.1007/s11205-008-9292-x

Neira, I., Portela, M., & Vieira, E. (2010). Social capital and growth in European regions, Regional and Sectoral Economic Studies, 10(2), 19-28.

OECD, (2001). The Well-being of Nations: The Role of Human and Social Capital, Paris.

Paldam, M., & Svendsen, G.T. (2000). An essay on social capital: looking for fire behind the smoke, European Journal of Political Economy, 16(2), 339-366. doi. 10.1016/S0176-2680(99)00064-6

Parts, E. (2003). Interrelationships between human capital and social capital: implications for economic development in transition economies, University of Tartu Economics and Business Working Paper, No.2003-24.

Peiró-Palomino, J. (2014). Social capital and economic growth in Europe: Nonlinear trends and heterogeneous regional effects, Universitat Jaume Economics Department Working Papers, No.2014/17.

Pfister, L. (2010). The effect of social trust on economic growth, Aarhus School of Business, Aarhus University, Master of Science in International Economic Consulting.

Ponzetto, G.A.M., & Troiano, U. (2014). Social capital, government expenditures, and growth, Unpublished Paper, doi. 10.2139/ssrn.2142548

Putnam, R., Leonardi, R., & Nanetti, R.Y. (1993). Making Democracy Work, Princeton University Press, Princeton, NJ.

Putnam, R.D. (2001). Social capital. Measurement and consequences, Canadian Journal of Policy Research, 2(1), 41-51.

Raiser, M., Haerpfer, C., Nowotny, T., & Wallace, C. (2002). Social capital in transition: a first look at the evidence, Sociologický časopis/Czech Sociological Review, 38(6), 693-720.

Roth, F. (2006). Trust and economic growth: Conflicting results between cross-sectional and panel analysis, The Ratio Institute, 102, 1-22.

Rupasingha, A., Goetz, S.J., & Freshwater, D. (2006). The production of social capital in US counties, The Journal of Socio-Economics, 35(1), 83-101. doi. 10.1016/j.socec.2005.11.001

Sabatini, F. (2006). The empirics of social capital and economic development: a critical perspective, FEEM Working Paper, No.15.2006, 1-35. doi. 10.2139/ssrn.879712

Salahuddin, M., Tisdell, C., Burton, L., & Alam, K. (2015). Social capital formation, internet usage and economic growth in Australia: evidence from time series data, International Journal of Economics and Financial Issues, 5(4), 942-953.

Sciarrone, R. (2002).The dark side of social capital: The case of mafia, Workshop on Social Capital and Civic Involvement, Cornell University.

Temple, J., & Johnson, P. A. (1998). Social capability and economic growth, Quarterly Journal of Economics, 113(3), 965-990. doi. 10.1162/003355398555711

Whiteley, P.F. (2000). Economic growth and social capital, Political Studies, 48(3), 443-466. doi. 10.1111/1467-9248.00269

Zak, P.J., & Knack, S. (2001). Trust and growth, The Economic Journal, 111(470), 295-321. doi. 10.1111/1468-0297.00609

World Bank, (1997). World Development Report: The State in a Changing World, New York: Oxford University Press.

Woolcock, M., & Narayan, D. (2000). Social capital: Implications for development theory, research, and policy, The World Bank Research Observer, 15(2), 2.




DOI: http://dx.doi.org/10.1453/jel.v4i1.1176

Refbacks

  • There are currently no refbacks.


.......................................................................................................................................................................................................................................................................................................................................

Journal of Economics Library - J. Econ. Lib. - JEL - www.kspjournals.org

ISSN: 2149-2379. Editor : editor-jel@kspjournals.org   Secretarial: secretarial@kspjournals.org   Istanbul - Turkey.

Copyright © KSP Journals