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Social capital, product imitation and growth with learning externalities

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  • Agénor, Pierre-Richard
  • Dinh, Hinh T.

Abstract

Links between social capital, human capital, and product imitation are studied in an overlapping generations model of economic growth with endogenous time allocation. Social capital promotes imitation and there is a two-way interaction between imitation and human capital. Building social capital (which brings direct utility) requires time and access to infrastructure. Because life expectancy is endogenously related to human capital, time allocation between market work and social capital accumulation is also endogenously determined. The analysis highlights a fundamental trade-off between learning externalities and the life cycle–time allocation effect. The model is calibrated for a low-income country. Numerical experiments show that a policy that helps to promote social capital accumulation may be highly effective to foster economic growth, even if it involves offsetting cuts in government spending on education. Offsetting cuts in infrastructure investment, however, may entail significant dynamic trade-offs.

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  • Agénor, Pierre-Richard & Dinh, Hinh T., 2015. "Social capital, product imitation and growth with learning externalities," Journal of Development Economics, Elsevier, vol. 114(C), pages 41-54.
    • Handle: RePEc:eee:deveco:v:114:y:2015:i:c:p:41-54
    DOI: 10.1016/j.jdeveco.2014.11.008
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    5. Agénor, Pierre-Richard & Neanidis, Kyriakos C., 2015. "Innovation, public capital, and growth," Journal of Macroeconomics, Elsevier, vol. 44(C), pages 252-275.
    6. Barış Alpaslan & Julide Yildirim, 2020. "The Missing Link: Are Individuals with More Social Capital in Better Health? Evidence from India," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 150(3), pages 811-834, August.
    7. Panagiota Makrychoriti & Fotios Pasiouras & Menelaos Tasiou, 2022. "Financial stress and economic growth: The moderating role of trust," Kyklos, Wiley Blackwell, vol. 75(1), pages 48-74, February.
    8. Baris Alpaslan, 2015. "Public Spending and Transitional Dynamics of an Innovation-Based Growth Model," Centre for Growth and Business Cycle Research Discussion Paper Series 199, Economics, The University of Manchester.
    9. Iryna Kalenyuk & Liudmyla Tsymbal, 2021. "Assessment of the intellectual component in economic development," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(6), pages 4793-4816, June.
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    11. Bo-Xiang Hsu & Yi-Min Chen, 2019. "Industrial policy, social capital, human capital, and firm-level competitive advantage," International Entrepreneurship and Management Journal, Springer, vol. 15(3), pages 883-903, September.
    12. Hung Quang Doan & Francesca Masciarelli & Andrea Prencipe & Nam Hoang Vu, 2023. "Social capital and firm performance in transition economies," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 13(4), pages 751-780, December.

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