The relationship between social capital and economic growth on a provincial and regional basis

Abstract

The aim of this study is to examine the relationship between the level of GDP per capita and social capital provinces and regions in Türkiye in the period of 2007-2018. The social capital index was used as a comprehensive variable to represent social capital. The relationships between the variables were analysed with the use of the panel Granger causality test. It was determined that there is a unilateral causality from GDP per capita to social capital in sixteen provinces, from social capital to GDP per capita in nine provinces and bilateral causality in 45 provinces. On the other hand, no significant relationship was found in eleven provinces. The results reveal that the level of social capital in terms of GDP per capita in 45 provinces in Türkiye and the level of GDP per capita in terms of social capital is a factor that should be considered. Regional causality results for Türkiye support the provincial causality results. These results provide key insights regarding the nexus between social capital and economic growth for policymakers and researchers.