Regional difference in social capital and its impact on regional economic growth in China

Abstract

Social capital has played an increasingly important role in regional development. China is a country with high stocks of social capital. Using several different indicators of social capital, this study tries to research the regional disparities in social capital and the influence of social capital on economic growth of China in 1978-2004. Measuring social capital with indicators of associations, charities and blood donation rates, this study finds significant regional disparities in social capital at provincial level in China. Those indicators for social capital are highly correlated with regional economic performance. Statistical analysis shows that social capital has a significant and positive effect on a long-term provincial economic growth. This relationship exists after controlling policy, macro location factors, and per capita GDP in the initial year. The empirical findings indicate that institutions, culture and social relations are critical for regional development in China. Therefore, the creation and support of social capital should be paid more attention to when making regional policy.