Working Paper: CEPR ID: DP17979
Authors: Roberto Ganau; Andrés Rodríguez-Pose
Abstract: We analyse the firm-level labour productivity growth returns of social capital —defined as a synthetic measure of ‘generalised trust’, ‘active participation’, and ‘social norms’— using a large sample of manufacturing firms in France, Germany, Italy, Portugal, and Spain. We find that firms’ labour productivity growth is higher in areas with a better social capital endowment. The positive returns of social capital are, nevertheless, unevenly distributed across firms, with smaller, less productive, less capital-endowed, and low-tech firms benefitting the most from operating in strong social capital ecosystems.
Keywords: firms; social capital; manufacturing industry
JEL Codes: C36; D24; R10; Z13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| social capital (Z13) | firm-level labour productivity growth (O49) |
| historical precipitation variability (1500-1750) (N53) | social capital (Z13) |
| social capital (Z13) | productivity growth for low-productivity firms (O49) |
| social capital (Z13) | productivity growth for small firms (L25) |
| social capital (Z13) | productivity growth for low-tech firms (O49) |
| social capital (Z13) | productivity growth for low-capital endowed firms (D29) |