Social Capital and the Viability of Nonprofit Firms: Evidence from Norwegian Savings Banks (original) (raw)
Related papers
2009
Stakeholder oriented governance systems are often thought to hamper efficiency. We show that social capital improves the viability of stakeholder-oriented firms in competitive markets. Studying exits from the population of Norwegian savings banks after deregulations, we find that banks located in communities with high social capital have a higher probability of survival. We propose that social capital facilitates collective decision-making,
Social Capital and the Growth of the Nonprofit Sector
Social Science Quarterly, 2005
Objectives. This article examines the extent to which nonprofit organizational foundings are determined by various forms of social capital. Our hypothesis is that, controlling for other relevant social, political, and economic factors, communities with higher levels of social capital should experience more extensive growth in their nonprofit sectors. Methods. Using data derived from the Social Capital Community Benchmark Survey and the IRS ‘‘charitable organization’’ Business Master Files, we test our hypothesis using a negative binomial event count regression on nonprofit organization foundings in 284 U.S. counties in the year 2001. Results. We find that two core dimensions of social capital — political engagement and ‘‘bridging’’ social ties — have a significant impact on county-level nonprofit foundings. Surprisingly, a key element of social capital in the literature, the level of interpersonal trust, does not lead to an increase in foundings of new not-for-profit organizations. Conclusions. This study provides further evidence of the strength of political engagement and bridging ties for the vitality of the community. It also shows that the different dimensions of social capital do not manifest a uniform effect on nonprofit sector growth. These results further demonstrate that the growth of a community’s not-for-profit sector is dependent on a mix of ecological and environmental factors, especially preexisting organizational density, median house- hold income, unemployment, and levels of governmental spending. Overall, social capital can usefully be seen as another key ‘‘environmental’’ factor in explanations of organizational foundings.
Social Capital, Economic Growth, and Nonprofit Organizations
istr.org
The study of determinants of economic growth and development is a special interest area to the economists. Theoretical investigation in this topic is characterized by a growing complexity and empirical work has not obtained satisfactory results. The incorporation of human capital and technical progress with endogenous character have not obtained the appropriate results to explain with clarity the key mechanisms of this economic phenomenon.
Voluntas, 2018
Based on the county-level longitudinal data in the USA, this study finds that racial diversity is positively associated with the nonprofit sector size. We further find that the share of children below poverty level is negatively associated with the size of nonprofit sectors. Our findings support the government failure theory. Random effects models also show that federal funding and local funding are positively associated with the size of nonprofit sectors, which confirms interdependence theory. Lastly, we do not find statistically significant relationship between social capital-measured by the number of associations-and the nonprofit sector size. Résumé Fondée sur des données longitudinales nationales américaines, la présente étude démontre que la diversité raciale est positivement associée à la taille des secteurs sans but lucratif. Nous découvrons de plus que la part d'enfants vivant sous le niveau de la pauvreté est négativement associée à la taille des secteurs sans but lucratif. Nos découvertes appuient la théorie de l'échec gouvernemental. Les modèles à effets aléatoires prouvent aussi que les financements fédéraux et locaux sont positivement associés à la taille des secteurs sans but lucratif, ce qui confirme la théorie de l'interdépendance. Nous ne décelons enfin pas de relation statistiquement importante entre le capital social, mesuré par le nombre d'associations, et la taille des secteurs sans but lucratif.
Can social capital explain business performance in Denmark?
Empirical Economics, 2019
Motivated by the limited evidence on the positive link between social capital and firm performance, this paper explores this potential driver of firm performance at the firm rather than macro-level by employing a novel approach: we capture social capital at a community level rather than focus on the narrow aspect of entrepreneurs' own social network. Using Principal Component Analysis to aggregate various trust, norm, and network related variables to construct social capital variables with more than 150,000 firm-level observations for firm performance variables, this paper identifies an overall positive and significant effect of social capital on firm performance in Denmark. These effects are robust to firm-level social capital measures, different sampling years and alternative measures of firm performance (return on asset, current ratio, solvency ratio and profit margin) and network (Putnam and Olson groups).
Social capital and the vitality of community based organizations
2007
Abstract: This paper examines the extent to which various forms of social capital impact community-level organizational vitality. My hypothesis is that, controlling for other relevant social, political and economic factors, communities with higher levels of social capital should experience more robust organizational and financial growth, and less failure, in their for-profit and nonprofit sectors.
Social capital and banking system profitability: A survey of European Union countries
European Journal of Government and Economics
Over the last years, the concept of social capital as a facilitator of economic activities has been a remarkable issue among economists. In this article, we study the impact of social capital on banking performance focusing on profitability in the European Union for period 2008-2016. Social capital indicators are applied in the model are "trust in others" and "fair behavior of others". We expect more profitable banks in societies with higher levels of social capital. According to the type of data, we apply GMM estimator to do more efficient estimations. We use auxiliary variables such as bank asset, capital adequacy, real interest rate, the cost to income ratio as micro variables, GDP and inflation are employed as macros. Our estimations point at a rejection of the main hypothesis. Opportunistic behavior and less social trust result in more profits for European countries. We justify the results in two ways. First, due to the 2008 financial crisis, trust in all in...
Social capital as a distinctive feature of Social Economy firms
International Entrepreneurship and Management Journal, 2012
In recent years, the growing importance in developed countries of the Social Economy sector and the contribution of social capital to regional economic development are being studied in depth. Linking these two fields of research, the aim of the present work is to analyse the social capital endowments of Social Economy firms in comparison to those in traditional profit-maximizing firms. To do so, a literature review will be firstly carried out to clarify both the concept of social capital and, more specifically, its relation with entrepreneurship and social enterprises. In the empirical section, the social capital endowments both of social firms (cooperatives and owned-worker enterprises) and traditional firms are compared using data from two surveys conducted in Andalusia, a lagged Spanish region with long tradition in the Social Economy sector. Results show that social capital endowments measured through cooperation agreements and company links with local suppliers and costumers are higher in cooperatives and worker-owned companies. Therefore, Andalusian authorities must continue with its support policy to these enterprises as a mean to reinforce the regional economic development.
Community Social Capital and Firm Performance
Journal of International Conference Proceedings, 2021
This study aims to contribute to the social capital theory. This goal is achieved through determine the relationship between social capital and firm performance. It is carried out because SME's have limited access to resources. SME's need other alternatives to sustain their business. Small entrepreneurs feel the need to focus more on their internal resources. The development of the theory of social capital is important. In contrast to most previous studies, this research uses qualitative study research methods. To obtain the data, in-depth interviews with key informants were conducted. The finding shows that social capital consists of reciprocity, trust, network, and norms. This study also provides evidence that social capital plays a pivotal role in SME performance. Small entrepreneurs get various benefits after joining the group. In addition, social capital can help empower ordinary housewives to become small-scale entrepreneurs. In conclusion, strong social capital can im...