The Role of Social Capital in Financial Development

Bibliographic Data

ID23355688
AuthorsLuigi Guiso (University of Sassari), Paola Sapienza (0000-0002-3663-422X, Northwestern University), Luigi Zingales (0000-0002-6804-1883, Graduate School of Business, University of Chicago, 1101 East 58th Street, Chicago, IL 60637, NBER, and CEPR.)
Year2004
Volume94
Issue3
Pages526-556
Publication date2004-05-01
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueAmerican Economic Review (JOURNAL)
Journal identifiersISSN: 0002-8282 • E-ISSN: 1944-7981
PublisherAmerican Economic Association (PUBLISHER • US)
DOI10.1257/0002828041464498
OpenAlexW3123344732
LanguageEN
Citations received389
References cited25

To identify the effect of social capital on financial development, we exploit social capital differences within Italy. In high-social-capital areas, households are more likely to use checks, invest less in cash and more in stock, have higher access to institutional credit, and make less use of informal credit. The effect of social capital is stronger where legal enforcement is weaker and among less educated people. These results are not driven by omitted environmental variables, since we show that the behavior of movers is still affected by the level of social capital of the province where they were born.

Demographic economics · Economic capital · Economic growth · Economics · Enforcement · Exploit · Financial capital · Human capital · Political science · Social capital · Finance · Financial Literacy, Pension, Retirement Analysis · Housing Market and Economics · Urban, Neighborhood, and Segregation Studies

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