Social capital, resilience, and regional diversification in Italy

Abstract

This article investigates the role of social capital for the entry and exit of industries in Italian provinces between 2004 and 2010. Results show that bridging social capital positively contributes to the net entry of new industries, especially when they are unrelated to existing specializations in a region, but it loses its impact on regional diversification during the economic crisis. Bonding social capital, instead, makes regions resilient in times of crisis, by reducing the probability of exit of industries. However, bonding social capital is also bad for regional resilience, as it keeps on having a negative impact on the entry of new industries in regions during an economic downturn.

Social capital and economic growth in the regions of Europe

“…According to Putnam (1993), networks transmit trust, reduce transaction costs and information asymmetry, and increase the density and intensity of interactions with positive externalities on economic growth in regions. Although the paper focuses on economic growth, it also draws on related studies looking at other socio-economic outcomes, such as innovation (Crescenzi and Gagliardi, 2015), regional diversification (Antonietti and Boschma, 2018;Cortinovis et al, 2017), and entrepreneurship (Feldman et al, 2019).…”

“…There are three different positions in the literature on how bonding social capital operates. The first position treats bonding social capital networks as "Olson-type groups" or "distributional coalitions" (Antonietti and Boschma, 2018;Cortinovis et al, 2017;Crescenzi and Gagliardi, 2015;Knack and Keefer, 1997;Rodr ıguez-Pose and Storper, 2006;Storper, 2005Storper, , 2013. This builds on the observations by Olson (1982) that interest groups create benefits for members, but impose disproportionate costs on the wider society.…”

“…Bridging social capital refers to the existence of open networks that connect heterogeneous groups (Antonietti and Boschma, 2018;Beugelsdijk and Smulders, 2009;Boschma, 2005;Cortinovis et al, 2017;Crescenzi and Gagliardi, 2015;Rodr ıguez-Pose and Storper, 2006;Storper, 2005Storper, , 2013. These networks are often also called "Putnam groups", building on the argument by Putnam (1993) that participation in civic or voluntary associations, such as educational and cultural groups, leads to positive social and economic outcomes.…”

Social capital, social economy and economic resilience of Italian provinces

“…Urso et al (2019), analysing the sectoral change of Italian municipalities in response to the Great Recession, have empirically shown how lower endowment of social capital-measured following Nannicini et al (2013)-reduces the probability of resisting external shock. Antonietti and Boschma (2020) investigated the role of social capital for the entry and exit of industries in Italian provinces between 2004 and 2010. The results of this study indicate that bridging social capital positively contributes to the net entry of new industries, but it loses its impact during periods of economic downturn, while bonding social capital makes regions resilient in times of crisis by reducing the probability of exit of industries.…”

“…Following the short‐term evolutionary approach, this paper empirically investigates the relationship between social capital and economic resilience in Italy during the Great Recession, using data from 103 provinces (NUTS 3). In the regional sciences literature, some contributions empirically investigated the link between social capital and economic resilience in the Italian context (e.g., Antonietti & Boschma, 2020; Di Caro, 2017; Lo Cascio et al, 2019; Mazzola et al, 2018; Sabatino, 2019; Urso et al, 2019). However, this literature still appears not to be fully consolidated, as it does not provide univocal evidence of the benefits that different forms of social capital bring to economic‐resilience processes.…”