Social Capital, Innovation and Growth: Evidence from Europe

Semih Akçomak & Bas ter Weel


This paper investigates the interplay between social capital, innovation and economic growth in the European Union. We identify innovation as an important mechanism that transforms social capital into economic growth. In an empirical investigation of 102 European regions in the period 1990-2002, we show that higher innovation performance is conducive to economic growth and that social capital affects growth indirectly by fostering innovation. Our estimates suggest that there is only a limited role for a direct effect of social capital on economic growth.

JEL classification: O1; O3; O52; Z13

Key words: Social capital; Innovation; Economic growth; European Union

UNU-MERIT Working Papers ISSN 1871-9872

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