Political leanings and social capital

Abstract

The research shows that the political leanings and social capital of the region around firms’ headquarters affect corporate and individual decisions. What remains unexplored is whether social capital and political leanings are associated with each other. To fill this gap, we use the ratio of votes cast for Democratic candidates to those cast for Republican candidates in presidential elections to measure the Democratic political leanings in the United States. We find that counties with more social capital lean toward the Democratic Party. A one standard deviation increase in social capital is associated with a 0.30 standard deviation increase in the vote ratio. Additional tests show that this positive association is stronger in counties that have higher incomes and less religiosity.