43rd Congress of the European Regional Science Association: "Peripheries, Centres, and Spatial Development in the New Europe", 27th - 30th August 2003, Jyväskylä, Finland
We study a cross-section of 54 European regions in the period 1950-1998. The central question is whether social capital, in the form of generalized trust and associational activity, is related to regional differences in economic growth. Based on extensive robustness tests, we present evidence that social capital measured as associational activity is positively related to growth differentials in European regions. Hence, our results suggest that Putnam’s (1993) thesis on social capital in Italian regions can be generalized. Our analysis also suggests that it is not only the mere existence of network relationships that stimulates regional economic growth, but also the level of actual involvement in these relationships.