Anneli Kaasa,

University of Tartu, Tartu, Estonia,

 anneli.kaasa@ut.ee

SOCIAL CAPITAL, INSTITUTIONAL QUALITY AND PRODUCTIVITY: EVIDENCE FROM EUROPEAN REGIONS

Abstract. This study investigates how institutional quality and different dimensions of social capital influence a region’s labour productivity. As a novelty, regional-level data (80 regions of 24 European countries) were analysed and five different dimensions of social capital were included. Correlation and regression analysis were conducted. The results showed institutional trust and civic participation, which have not received much attention in the literature, to be the most important for productivity. Improving institutional quality would be helpful for productivity, but people’s perception of  institutional quality, trust in institutions and feeling of participation is even more important.

Received: March, 2016

1st Revision: September, 2016

Accepted: November, 2016

DOI: 10.14254/2071-789X.2016/9-4/1

JEL Classification: J24, O40, R11, K40

Keywords: productivity, social capital, institutional quality, Europe, regions.