Handbook of Social Capital and Regional Development
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Handbook of Social Capital and Regional Development

Edited by Hans Westlund and Johan P. Larsson

The role of social capital in regional development is a multifaceted topic which is studied all over the world using various methods and across numerous disciplines. It has long been evident that social capital is important for regional development, however, it is less clear how this works in practice. Do all types of social capital have the same effects and are different kinds of regions impacted in the same way? This book is the first to offer an overview of this rapidly expanding field of research and to thoroughly analyse the complex issue of social capital and regional development.
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Chapter 7: Social capital and the economics of cities

Martin Andersson, Johan P. Larsson and Joakim Wernberg


Social capital has often been conceived of as a set of theories more apt for the analysis of rural areas than for metropolitan cities. Yet cities are teeming with interaction and other network phenomena, analyzed in the urban economics literature on social interactions. In this chapter, we bridge these strands of theories by emphasizing link directness (depth of connections) and link thickness (frequency of interaction) as key characteristics for the analysis of social capital in urban and rural settings alike. We demonstrate how social capital and ‘network-of-network’ effects of thin links (abundant in cities) can strongly mimic effects of agglomeration economies. Our framework maintains that previous emphases on isolating the effects of agglomeration effects on economic outcomes should be complemented by an understanding of how effects of social capital pertain, for example, to attitudes to entrepreneurship and industriousness. We suggest that these effects may be understood through the following mechanisms: Peer effects and Learning, and Imitation and Emulation.

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