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Does social capital improve regional economic growth?
- Investigation using prefectural cross-sectional data in Japan -

summary

The purpose of this research is to empirically examine the relationship between social capital and regional economic growth using prefectural data in Japan.

The concept of social capital has been increasingly discussed in recent literature, however, research on social capital has just started in Japan. There is no established technique to measure social capital quantitatively. In this research, I measure the level of social capital by the index of trust and the index of norm. These indices are thought to be the main components of social capital because they promote cooperation among community members. Making use of these indices, I conduct an empirical test using Barro Regression method, which is often used in empirical studies on cross-country economic growth differences. I find that the norm index has a positive impact on regional economic growth, while the trust index does not.

The finding suggests that social capital improves the regional economic growth in Japan and policy makers should take into consideration the positive effect from social capital to stimulate the regional economy.


Key words

social capital, trust, norm, regional economic growth

issue

Reports No.61/2005 Dec.

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