Social capital, economic growth and regional development

Iyer S., Kitson M. and Toh B. (2005) Social capital, economic growth and regional development, Regional Studies 39 , 1015-1040. This paper examines the relationships between social capital, economic performance and regional development, and it stresses the complexity and variability across space of such relationships. In contrast to the conventional macroeconomic approach of using indicators of social capital in formal growth models, what is required is a more nuanced analysis that evaluates the impact of social capital by region. To support this argument, the paper examines social capital data from the Social Capital Community Benchmark Survey 2000, which provides social capital data for more than 24 000 individuals living in 40 communities, grouped into nine regions, in the USA. These data show remarkable diversity of social capital by region. Multivariate analysis is used to examine the impact of economic and social determinants of social capital and shows that education is important for nearly all indicators of social capital, and that ethnic diversity is associated with lower levels of social capital. Furthermore, analysis indicates the need to distinguish between local and non-local forms of social capital. The paper concludes by suggesting that future analysis of social capital will benefit from a more region-specific approach towards examining its development and impacts.