High Social Capital Research Articles

The value of social capital in small business lending: Evidence from the Small Business Administration program

AbstractWe explore how social capital influences small business lending under the Small Business Administration (SBA) program. We find that banks reduce loan spreads for SBA borrowers located in counties with high social capital. This effect is stronger among SBA Express lenders or when lenders face higher information asymmetry, but weaker during periods of more government assistance and SBA guarantee. Firms located in higher social capital counties are also less likely to default on their loans. Overall, our findings highlight the role of social capital—as an important source of soft information— in the pricing and performance of small business loans.

THE IMPACT OF SOCIAL CAPITAL ON THE PERCEPTION AND REALITY OF PUBLIC SECURITY

Social capital plays a crucial role in strengthening public security by influencing both the perception and reality of safety within a community. This complex concept, defined by mutual trust, social networks, and norms of reciprocity, facilitates cooperation between citizens and authorities, contributing to crime reduction and enhanced community resilience. In a community with high social capital, the perception of safety is improved through trust in neighbors and law enforcement institutions, encouraging citizens to engage actively in community life and collaborate in risk prevention. Local social networks, whether offline or online, play an important role in sharing relevant information, discouraging antisocial behavior, and mobilizing resources in emergencies. However, the perception of safety, often influenced by media and social networks, can amplify fear of insecurity even in the absence of real risks, leading to social isolation and fragmentation. In such situations, transparent communication from authorities and community policing initiatives are essential for restoring trust and a sense of security. Thus, social capital supports both a positive perception of safety and actual security by fostering united, responsible communities capable of managing security risks effectively.

CEO social capital and the readability of 10-K reports

This paper examines how CEO social capital affects the readability of 10-K reports. Drawing on social capital theory, we show that firms led by CEOs with higher social capital, measured in terms of their centrality within their social networks, tend to issue less readable reports. Cross-sectional analysis reveals that this association becomes more prominent when CEOs are more influential and powerful, when their peers more often issue less readable reports, suggesting the existence of contagion within the social network, and when they operate in competitive industries, supporting the evidence that less readable reports are used to avoid losing competitive advantages. Collectively, our results show that CEO social capital can shape the linguistic quality of corporate disclosure and forms an important determinant of 10-K report readability. Overall, we contribute to the literature by highlighting that social capital does not necessarily lead to better financial reporting quality. Instead, it can lead to the adoption of opportunistic behaviours aimed at masking firms’ fundamental accounting information.

Social Capital, Waste Generation, and Firm Performance

This study explores how social capital influences the relationship between waste generation and firm performance. Using data from 2973 non-financial firms across 50 countries from 2010 to 2020, we find that the adverse effects of waste generation on firm performance are more pronounced in countries with high social capital. Specifically, the interaction term between social capital and waste generation is significantly negative, suggesting that firms in these countries experience a greater decline in performance due to waste generation. Our results are robust across various estimation strategies, including Fama–MacBeth, pooled OLS, and panel regressions, and hold under different sample structures and proxies for waste generation. These findings underscore the critical role of social capital in moderating the environmental impact on firm performance, highlighting the need for stricter waste management regulations in countries with low social capital.

Community- and individual-level social capital and cognitive function among older adults in China: a multilevel analysis

Objectives This study aimed to examine (a) the association of cognitive function with community- and with individual-level cognitive and structural social capital, and (b) the cross-level interaction effects of social capital on cognitive function among older adults in China. Method Quota sampling was used to collect data from 800 respondents living in 20 communities in Tianjin and Shijiazhuang, China, in 2020. Multilevel analysis was conducted to examine the hypotheses. Results Individual-level structural social capital was significantly associated with better cognitive function. Furthermore, individual-level cognitive social capital was negatively associated with cognitive function among older adults with low community-level structural social capital, whereas the above association was positive among those with high community-level structural social capital. Following the same pattern, the associations between community-level structural social capital and cognitive function varied by individual-level cognitive social capital. Conclusion This research highlights the protective role of individual-level structural social capital in Chinese older adults’ cognitive function. It also delivers in-depth insights into the varying associations between social capital and cognitive function across different communities or individuals. Future research and practices should focus on cultivating social capital at both levels, and pay attention to the cross-level interactions of social capital.

Regional Social Capital and Non-GAAP Earnings Disclosure

We investigate whether regional social capital is associated with a company’s discretionary disclosures of non-GAAP earnings. The US county level social capital is used to capture the informal supervisory instrument of regional social capital. The two dimensions of social capital, dense networks and strong norms in regions with high social capital, cause reciprocity, integrity, and organizational citizenship. Using a panel of US companies, we find that companies located in regions with high social capital (1) are more likely to disclose non-GAAP earnings, and (2) their non-GAAP earnings disclosures have higher quality. These findings are robust to controlling for demographic features, substitute proxies for regional social capital, and using two-stage least squares and propensity score matching approaches. Furthermore, we implement a mediator analysis and show that companies in high social capital regions have lower costs of equity capital because they are more likely to disclose non-GAAP earnings, and their disclosures are of higher quality. Overall, the findings indicate that the informal institutional factor of regional social capital is associated with the crucial voluntary disclosure tool of managers’ non-GAAP earnings.

Psychological capital and social class: A capital approach to understanding positive psychological states and their role in explaining social inequalities.

Psychological capital (PsyCap) is a multidimensional concept entailing hope, self-efficacy, optimism, and resilience. This paper argues that it can be considered a form of "capital" explaining social inequality. We test whether PsyCap can be integrated into the Bourdieusian capital framework by assessing its relationship with social, economic, and cultural capital. We also identify different types of social positions based on the volume and composition of psychological, economic, cultural, and social capital. We use cross-sectional data from the European Social Survey of 2012 (N = 35,313 respondents; 29 countries). To test the associations with the Bourdieusian capital types, we calculated multilevel spearman rank correlations and performed confirmatory factor analyses (CFA). Latent Class Analysis identified different types of social positions. We found positive weak correlations between PsyCap and the indicators of cultural capital (r ≤ .14) and positive moderate correlations with the indicators of economic and social capital (r ≤ .24). The results of the CFA showed that the fit of the 4-capital model was superior to that of the 3-capital model. We identified six types of social positions: two deprived types (with overall low capital levels); two well-off types (with overall high capital levels) and two types with high psychological and social capital in combination with varying levels of cultural and economic capital. Including PsyCap in the Bourdieusian capital framework acknowledges the power of positive psychological states regarding processes of social mobility and social inequality on the one hand and calls for understanding PsyCap as a social and group-level phenomenon on the other hand. As such, integrating PsyCap into the Bourdieusian framework can help to address the longstanding issue of understanding the relationship between social and individual differences in the study of social inequalities.

High social capital facilitates the alleviation of psychological distress in breast cancer patients: Insights from a cross-sectional study in Anhui Province, China.

Differences in social capital have been shown to impact psychological distress in cancer patients, but few studies have examined the relationship between social capital and the distress thermometer (DT) in breast cancer patients who have undergone modified radical surgery. To fill this research gap, our study aimed to investigate the association between social capital and the DT among breast cancer patients who underwent modified radical surgery in Anhui Province, China. This cross-sectional study used multi-stage stratified random sampling. Data on demographic characteristics, eight dimensions of social capital, and the DT were collected using a questionnaire. Logistic regression models were subsequently utilized to assess the relationship between social capital and DT, adjusting for confounding factors. A total of 253 participants were included in the final analysis. Results indicated that individuals with higher levels of social capital, including participation in the local community (OR = 3.437; 95% CI: 1.734-6.814), social agency or proactivity in a social context (OR = 69.700; 95% CI: 20.142-241.195), feelings of trust and safety (OR = 26.287; 95% CI: 7.646-90.374), neighborhood connections (OR = 7.022; 95% CI: 3.020-16.236), family and friend connections (OR = 59.315; 95% CI: 17.182-204.760), tolerance of diversity (OR = 9.785; 95% CI: 4.736-20.216), value of life (OR = 65.142; 95% CI: 19.994-212.242), and work connections (OR = 31.842; 95% CI: 12.612-80.397), had higher odds of reporting poor DT scores compared to those with lower levels of social capital. These findings indicate an association between social capital and DT scores in breast cancer patients who have undergone modified radical surgery, suggesting that social capital may play a crucial role in alleviating psychological distress within this community.

‘You come as a human being…’: exploring sense of equality in arts interventions through an ethnographic study of Shared Reading

Research shows that the arts hold a particular potential for promoting health, well-being and social inclusion for vulnerable people. However, the use and consumption of the arts tend to be...

Does social capital matter in underwriter's fees?

This study examines the influence of bond issuer's social capital on underwriting fees. Investors rely on accurate information to evaluate bond quality, while underwriters assume inventory risk stemming from uncertain investor demand. We posit that social capital enhances the quality of information disclosed by the issuer, consequently impacting the fees underwriters charge for bearing this risk. Utilizing data on new tax-exempt municipal bonds issued from U.S. counties over the period 1990–2017, we find that underwriters charge significantly lower fees for bonds issued from counties with higher social capital. This result remains robust after controlling for issuer and bond characteristics, as well as addressing potential endogeneity concerns. Further investigations show that the observed effect persists only in situations where underwriters bear greater risk, suggesting that social capital functions as a valuable form of certification within the underwriting process.

Party organization embedded and corporate internal control level

Embedding Party elements in corporate governance is not only a characteristic of Chinese corporate governance but also plays a positive role in improving the quality of internal control in Chinese enterprises. The results of this study show that the embedding of enterprise Party organizations can enhance the level of corporate internal control, and this impact is more pronounced in state-owned enterprises and in companies where the CEO has higher social capital. The findings of this study have theoretical significance and practical value in fully leveraging the leading role of enterprise Party organizations and promoting the high-quality development of Chinese enterprises.

The relationship between social capital and inflammatory biomarkers in early adulthood: A longitudinal study.

Higher levels of social capital (SC) are associated with better health status. However, there is little evidence of the impact of SC on biological health outcomes in the early ages. To identify the association between SC in adolescence and inflammation levels in early adulthood. Prospective study using data from 2435 participants from the Epidemiological Health Investigation of Teenagers in Porto cohort. SC was assessed at age 17 through a self-administered questionnaire, and high-sensitivity C-reactive protein (hs-CRP) and leucocytes were measured in a fasting blood sample at 17 and 21 years-old. A principal components analysis was performed to identify the domains of SC. Simple linear regressions were performed to assess the association between SC components and inflammatory status at 17 and 21years old. Pathway analysis was performed to assess the direct, indirect, and total effects of SC on hs-CRP and leucocyte levels. We did not find a significant total effect between SC at 17 years-old and hs-CRP at 21 years-old. However, the Trust/Reciprocity dimension showed a significant direct effect between SC and hs-CRP levels at 21 (β=-0.065, 95% CI: -0.129; -0.001), as well as a significant total effect (β=-0.075, 95% CI: -0.139; -0.011). Regarding leucocyte levels, total SC at 17 years-old was associated with leucocytes levels at 21 (β=-0.115, 95% CI: -0.205; -0.024). Significant direct (β=-0.104, 95% CI: -0.194; -0.014) and total effect (β=-0.107, 95% CI: -0.199; -0.015) of Trust/Reciprocity on leucocyte levels were observed. Adolescents with higher SC have a low inflammatory level in early adulthood, especially those with greater levels of trust/reciprocity.

Social capital and supply chain relationships

AbstractWe examine the role of social capital in influencing decisions pertaining to buyer–supplier relationships. We report that firms make larger relationship‐specific investments when their supply chain partners are headquartered in states with high social capital. This result is more pronounced when supply chain partners have incentives to engage in opportunistic behavior. Furthermore, the duration of supply chain relationships is longer when the firm and its supply chain partner are both headquartered in high social capital states, and when the partner invests in relationship‐specific assets. Collectively, the evidence suggests that social norms reflecting trustworthiness facilitate investment and stability along supply chains.

Perception of place, active transportation, and community participation: A mediation analysis

IntroductionActive transportation is associated with many benefits, including community participation, a salient form of social capital. Positive neighborhood perceptions are likewise associated with higher social capital, including community involvement. However, little is known about how active transportation may mediate the relationship between perception of place and community participation. MethodsUsing representative data from the Survey of the Health of Wisconsin (n = 1758), path analysis within a structural equation modeling framework assessed mediation. Covariates include age, education, race/ethnicity, gender, and community size. ResultsResults suggest perception of place (well-maintained, interesting places with walkable destinations) has a relationship to community participation (p = 0.001); however, when assessed for mediation through active transportation, only an indirect effect remained significant (p = 0.003), indicating the relationship between perception of place and community participation occurs through active transportation. ConclusionsInvesting in bike and pedestrian infrastructure that connects places, creates interesting spaces, and protects funding for routine maintenance is critical to support higher participation in active transportation as well as higher social capital in the form of greater involvement in community participation. Inequities in maintenance and infrastructure may impact not only active transportation, but community participation as well.

The impact of social capital on major customer supply chain power

We investigate the impact of regional social capital on firms' ability to attain bargaining power over their supply chain partners. Using ordinary least squares and instrumental variables estimations, we find a positive relationship between firm-level supply chain power and US county-level social capital. Additionally, we observe this positive effect to be stronger for firms in durable goods manufacturing and the services industry, but not for nondurable goods manufacturers. We conclude that firms headquartered in US counties with high social capital are preferred by suppliers, resulting in greater supply chain power.

Community Social Capital in Community Forest Management in Poso Pesisir District

In Indonesia, commercial management of community forests began several hundred years ago. This research aims to measure the level of social capital in community forest management, and analyze its influence on community forest performance. The research was carried out using a survey method. Two villages in one district were chosen purposively. Respondents were 60 people that randomly selected from each village. The results of the research reveal that the level of social capital of the two communities in community forest management is classified as different. High social capital has facilitated the revival of good community forest performance, which is characterized by high levels of community forest productivity, as well as continuing sustainable management of community forests, the benefits of regulations. fair management and cost efficiency of community forest management. Strong social capital drives better performance. This research concludes that community social capital in managing community forests in Toini Village is relatively high, while in Betania Village it is low. Considering the differences in social capital that exist in society, the author suggests the need to increase parties, especially the government, to support forest management through increasing roles, facilitating the expansion of social networks, and strengthening the implementation of rules to the community.

Social capital and health beliefs: Exploring the effect of bridging and bonding social capital on health locus of control among women in Dhaka

This cross-sectional study examined if social capital affects women's health attributions. The study used the Internet Social Capital Scale (ISCS) and Multidimensional Health Locus of Control (MHLC) Scale to measure Social Capital and Health Locus of Control. A predefined 38-item questionnaire was used to survey 485 purposively selected women. A bidirectional reciprocal structural equation model was used to measure the covariance between Social Capital and Health Locus of Control. We hypothesized that women with strong social capital, particularly those rich in bridging ties, would exhibit a greater sense of agency and empowerment over their health, attributing their health outcomes less to internal factors like fate and more to external influences like powerful others and broader social support. However, we found that when women have higher social capital, their external health locus of control increases. Bridging and bonding social capital lower women's internal health control, but bridging social capital leads to higher attributes to powerful others. Likewise, we expected women with more social capital would exhibit a lower perception of uncontrollability over their health, but is not the case. The findings underscore the necessity for women to have more social capital.

Remedial, institutional or radical? Explaining community responses to violence against women in an NGO programme to prevent violence in Mumbai, India

Despite ambitions in development and global health policy to transform communities into supportive environments for women facing risks of violence, our understanding of how to best engage communities remains incomplete. In particular, there is little evidence on the types of strategies that communities employ to address violence against women (VAW). We aimed to describe and analyse the processes involved in community responses to incidents of VAW in a non-governmental organisation (NGO) violence prevention programme in Mumbai, India. We conducted a grounded theory study involving 30 focus group discussions and 36 semi-structured interviews with 113 community members and 9 NGO staff, as well as over 170 h of field observation. Informed by comparative case study methods, we compared community actions across six informal settlement neighbourhoods. We found considerable variation in the type of action taken across neighbourhoods. This variation was not arbitrary, but reflected systematic cost-benefit considerations in heterogeneous environments, accounting for factors such as trust in neighbours, violent (armed or gang-related) crime, and corruption in state institutions. We found that institutional action was only favoured in neighbourhoods with strong state capacity and high social capital, whilst remedial action—resolving violence through ‘private’ talks in the family and community—and radical action involving extra-judicial violence—became favourable under conditions of weak social capital or low state capacity. Institutional action was, however, sometimes as violent as radical action, as police were reported, sometimes even relied upon, by residents to use force against perpetrators of VAW. We argue that these contextual features oblige policymakers and prevention researchers to grapple with contentious issues such as the legitimate use of force by the state. We caution against maximising community action without a clear vision of the type of action hoped for.

Acquisitions and social capital

AbstractWe examine the association between the social capital—social norms that encourage altruism and discourage opportunism—in the state of the firm's headquarters and the acquisitions it makes. We find that the cumulative abnormal return around an acquisition announcement is high when an acquirer is headquartered in a high social capital state in the United States. This effect is robust and incremental to the effect of a firm's corporate social responsibility (CSR) ratings and economically comparable to the effect of corporate governance. The effect of social capital is stronger for firms that have lower CSR ratings, which indicates social capital may act as a substitute for CSR. An additional analysis shows that social capital's effect is stronger in a subsample of firms with weak corporate governance. Acquirers from states with high social capital also demonstrate less hubris in acquiring targets than those from states with low social capital as the evidence of lower bid premiums indicates. Overall, our results show that the social norms that social capital measures mitigate potential agency problems in acquisitions by inducing managers to honor their obligations to shareholders.

How does social entrepreneurship achieve sustainable development goals in rural tourism destinations? The role of legitimacy and social capital

Rural tourism has emerged as a pivotal catalyst for local economic development, particularly in emerging economies. However, sustainable rural tourism development should not solely prioritize economic outcomes but also emphasize social values. Social entrepreneurship underscores both economic and social values, presenting a viable approach to attaining sustainable development goals (SDGs) in rural areas. This study introduces the concepts of legitimacy and social capital to examine how social entrepreneurship achieves SDGs in rural tourism destinations using a case study of Mingyue village in China. The findings suggest that social enterprises establish their legitimacy by effectively navigating institutional complexity while also fostering social capital at the community level, which ultimately facilitates the transition of the community from “low legitimacy-low social capital” to “high legitimacy-high social capital.” Throughout this process, social entrepreneurship promotes individual empowerment and enhances collective efficacy, thereby contributing to achieving SDGs. In essence, this paper constructs a theoretical framework illustrating how social entrepreneurship achieves SDGs while providing valuable insights into exploring the sustainable development of rural tourism driven by such entrepreneurial endeavors.