nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2007‒04‒28
fifteen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. How do social capital and government support affect innovation and growth? Evidence from the EU regional support programmes By Akcomak, Semih; Ter Weel, Bas
  2. The Power of the Family By Alberto Alesina; Paola Giuliano
  3. Collective Social Dynamics and Social Norms By Fent, Thomas
  4. No Man is an Island, the Inter-personal Determinants of Regional Well-Being in Europe By Aslam, A.; Corrado, L.
  5. The Evolution of Roommate Networks: A Comment on Jackson and Watts JET (2002) By Klaus Bettina; Klijn Flip; Walzl Markus
  6. Corporate social responsibility and shareholder's value: an event study analysis By Leonardo Becchetti; Rocco Ciciretti; Iftekhar Hasan
  7. Entrepreneurial decision-making in cooperative organizations - a case study research By Brunner, Daniel; Voigt, Tim
  8. Can social interaction contribute to explain business cycles? By Gomes, Orlando
  9. Organizational Dynamics By Shingo Ishiguro
  10. Cultural Assimilation, Cultural Diffusion and the Origin of the Wealth of Nations By Oded Galor; Quamrul Ashraf
  11. Punishment, Inequality and Emotions By David Masclet; Marie-Claire Villeval
  12. Self-selection patterns in Mexico-U.S. migration: The role of migration networks By David McKenzie; Hillel Rapoport
  13. On Gender Inequality and Life Satisfaction: Does Discrimination Matter? By Justina A.V. Fischer; Christian Bjornskov; Axel Dreher
  14. Does context matter more for hypothetical than for actual contributions? Evidence from a natural field experiment By Alpizar, Francisco; Carlsson, Fredrik; Johansson-Stenman, Olof
  15. Personal Identity in the Dictator Game By Fernando Aguiar; Pablo Branas-Garza; Maria Paz Espinosa; Luis M. Miller

  1. By: Akcomak, Semih (UNU-MERIT); Ter Weel, Bas (UNU-MERIT)
    Abstract: This research investigates the role of social capital and government intervention in explaining the differences of innovation output and economic growth for regions of the European Union from 1990-2002. Using several measures of social capital and innovation, and the European Union’s Objective 1, 2 and 5b figures for EU regional support, the estimates suggest that EU funding is not significantly contributing to economic outcomes, while social capital is. Investigation of a possible complementary relationship between social capital and government support reveals that regions with higher levels of social capital are more likely to effectively gain from EU regional support programmes. This result implies that aside from the benefits associated with the direct effect of social capital on economic outcomes, social capital appears to be a critical prerequisite for the effective implementation of government programmes. From a policy perspective, it appears to be important to stimulate education to foster human capital formation. When combined, human capital and social capital are likely to yield stronger effects for effective policies which increase economic outcomes.
    Keywords: Social capital, Innovation, Economic growth, European Union, Structural funds
    JEL: O1 O3 O52 Z13
    Date: 2007
  2. By: Alberto Alesina; Paola Giuliano
    Abstract: The structure of family relationships influences economic behavior and attitudes. We define our measure of family ties using individual responses from the World Value Survey regarding the role of the family and the love and respect that children need to have for their parents for over 70 countries. We show that strong family ties imply more reliance on the family as an economic unit which provides goods and services and less on the market and on the government for social insurance. With strong family ties home production is higher, labor force participation of women and youngsters, and geographical mobility, lower. Families are larger (higher fertility and higher family size) with strong family ties, which is consistent with the idea of the family as an important economic unit. We present evidence on cross country regressions. To assess causality we look at the behavior of second generation immigrants in the US and we employ a variable based on the grammatical rule of pronoun drop as an instrument for family ties. Our results overall indicate a significant influence of the strength of family ties on economic outcomes.
    JEL: H20 J01
    Date: 2007–04
  3. By: Fent, Thomas
    Abstract: How individual behaviour is determined or at least influenced by social norms is one of the classic questions of social theory. We consider a norm as a rule guiding individual decisions concerning rituals, beliefs, traditions, and routines. Whenever coordinated behaviour is enforced without the help of an authority, this may be due to social norms. The individual being in the situation of taking a decision at the micro level is guided by social norms imposed at the macro level. The set of all individual decisions in a society generates the macro level behaviour of the system which may strengthen or weaken the existing social norms. Thus, the long run development of social norms is the result of collective dynamics within a social network. We use an agent based simulation model to investigate the emergence, stability, and replacement of social norms within a population of artificial agents. A social network connecting the agents serves to communicate the social norms and the actual behaviour among the agent population. The agents in the network possess two types of links connecting them with their ingroup and with their outgroup, respectively. Agents have the desire to be associated and accepted by the members of their ingroup and they want to be different from the members of their outgroup. Consequently, they derive a utility from adhering to the social norm of their ingroup and from deviating from the social norm of their outgroup. Agents may adopt their behaviour according to the norms given by their ingroup and outgroup. Thus, our model explains under what conditions social norms prevail within a subgroup of the society or even become global norms being respected within the whole population.
    Keywords: social norms; sociel networks; social interaction; collective social dynamics; ingroup; outgroup; agent based modelling
    JEL: C63 C61 Z13 D85
    Date: 2006–02–23
  4. By: Aslam, A.; Corrado, L.
    Abstract: There is a strong need to complement the analysis of social well-being at the European regional level to supplement existing, predominantly economic analysis. This work extends the measurement of well-being across the EU-15 regions in several ways. First, we assess the determinants of well-being using a multilevel modelling approach using data at the national, regional and individual levels. Second, we have extended the model to account for the effects of social interactions within each group, as well as intrinsic socio-demographic indicators and higher-level exogenous contextual factors. Empirical findings support the idea that well-being is strongly dependent both on these general forms of social interactions and on more specific individual characteristics. We find that there is some evidence of greater regional effects relative to national effect.
    Keywords: Multilevel Modelling, Regional Well-Being, Social Interactions, Social Distance.
    JEL: R1 I31 O18 D31 D6
    Date: 2007–04
  5. By: Klaus Bettina; Klijn Flip; Walzl Markus (METEOR)
    Abstract: In this note we extend Jackson and WattsJET2002''s result on the coincidence of S-stochastically stable and core stable networks from the marriage problem to the solvable roommate problem. In particular, we show that the polarization structure of the marriage problem on which the proof of Jackson and WattsJET2002 hinges, is not crucial for their result.
    Keywords: microeconomics ;
    Date: 2007
  6. By: Leonardo Becchetti; Rocco Ciciretti; Iftekhar Hasan
    Abstract: Corporate social responsibility (CSR) is increasingly a core component of corporate strategy in the global economy. In recent years its importance has become even greater, primarily because of the financial scandals, investors’ losses, and reputational damage to listed companies. While corporations are busy adopting and enhancing CSR practices, there is (beyond very few notable exceptions) no established empirical research on CSR’s impact and relevance in the capital market. This paper investigates this issue by tracing the market reaction to corporate entry and exit from the Domini 400 Social Index, recognized as a CSR benchmark, between 1990 and 2004. The paper highlights two main findings: a significant upward trend in absolute value abnormal returns, irrespective of the type of event (for example, addition or deletion from the index), and a significant negative effect on abnormal returns after exit announcements from the Domini index. The latter effect persists even after controlling for concurring financial distress shocks and stock market seasonality.
    Date: 2007
  7. By: Brunner, Daniel; Voigt, Tim
    Abstract: In the context of innovation activitties, the process of new product development and their implementation in the internal structure of the organization requires knowledge communication and decision-making on different levels of the cooperative network. The functions of entrepreneurship are not any longer limited to a single firm but are divided up into different parts along the cooperative network. In our paper we address the question how the requiered market knowledge can be perceived and incorporated in the complex structure of cooperative organizations. The methodological approach of the paper is related to the idea of theorizing by meands of case study research. Therefore we introduce a modified concept of the innovation process with six idealized phases. The results are integrated in the framework by the illustration of three selected practical examples of innovation activities carried out by a German cooperative in the past.
    Keywords: cooperatice; case study research; innovation process; entrepreneurship; decision-making;
    JEL: M13
    Date: 2007–04–23
  8. By: Gomes, Orlando
    Abstract: Recent literature has been able to include into standard optimal growth models some hypotheses that allow for the generation of endogenous long run fluctuations. This paper contributes to this endogenous business cycles literature by considering social interactions. In the proposed model, individuals can choose, under a discrete choice rule, to which social group they prefer to belong to. This selection process is constrained essentially by the dimension of the group, which is the main determinant regarding the utility individuals withdraw from social interaction. The proposed setup implies the presence of cycles and chaotic motion describing the evolution of group dimension over time. Because being member of a group involves costs to households, the inclusion of these costs in a standard Ramsey growth model will imply that endogenous cycles might arise in the time trajectory of the growth rate of output.
    Keywords: Social interaction; Business cycles; Growth models; Nonlinear dynamics and Chaos; Discrete choice.
    JEL: C61 Z13 E32
    Date: 2006–10
  9. By: Shingo Ishiguro (Graduate School of Economics, Osaka University)
    Abstract: This paper provides a dynamic general equilibrium framework to investigate how organizations change the modes to govern transactions over time. We show that the agency problem becomes less serious when the economy is developed well so that large market size favors decentralized organizations having more specialization. We then show that different organizational modes endogenously emerge even in the same economy and cause endogenous process of economic development.
    Keywords: Economic Development, Incentive Contracts, Moral Hazard, Specialization
    JEL: D82 G30 L22 O11
    Date: 2007–05
  10. By: Oded Galor; Quamrul Ashraf
    Date: 2007
  11. By: David Masclet (CREM - Centre de Recherche en Economie et Management - [CNRS : UMR6211] - [Université Rennes I][Université de Caen]); Marie-Claire Villeval (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines])
    Abstract: Cooperation among people who are not related to each other is sustained by the availability of punishment devices which help enforce social norms (Fehr and Gächter, 2002). However, the rationale for costly punishment remains unclear. This paper reports the results of an experiment investigating inequality aversion and negative emotions as possible determinants of punishment. We compare two treatments of a public good game, one in which costly punishment reduces the immediate payoff inequality between the punisher and the target, and one in which it does not affect inequality. We show that while inequality-aversion prevents some subjects from punishing in the equal cost treatment, negative emotions are the primary motive for punishment. Results also indicate that the intensity of punishment increases with the level of inequality, and reduces earnings inequality over time.
    Keywords: cooperation ; experiment ; Free-Riding ; inequity aversion ; negative emotions
    Date: 2007–04–23
  12. By: David McKenzie (World Bank, Development Economics Research Group); Hillel Rapoport (Department of Economics, Bar-Ilan University, CADRE, Université de Lille 2, and CReAM, University College London)
    Abstract: This paper examines the role of migration networks in determining self-selection patterns of Mexico-U.S. migration. We first present a simple theoretical framework showing how such networks impact on migration incentives at different education levels and, consequently, how they are likely to affect the expected skill composition of migration. Using survey data from Mexico, we then show that the probability of migration is increasing with education in communities with low migrant networks, but decreasing with education in communities with high migrant networks. This is consistent with positive self-selection of migrants being driven by high migration costs, as advocated by Chiquiar and Hanson (2005), and with negative self-selection of migrants being driven by lower returns to education in the U.S. than in Mexico, as advocated by Borjas (1987).
    Keywords: Migration, migration networks, educational attainments, self-selection, Mexico
    JEL: O15 J61 D31
    Date: 2007–01
  13. By: Justina A.V. Fischer; Christian Bjornskov; Axel Dreher
    Abstract: This paper analyzes the impact of gender discrimination on individual life satisfaction using a cross-section of 66 countries. We employ measures of discrimination of women in the economy, in politics, and in society more generally. According to our results, discrimination in politics is important to individual well-being. Overall, men and women are more satisfied with their lives when societies become more equal. Disaggregated analysis suggests that our results for men are driven by the effect of equality on men with middle and high incomes, and those on the political left. To the contrary, women are more satisfied with increasing equality independent of income and political ideology. Equality in economic and family matters does overall not affect life satisfaction. However, women are more satisfied with their lives when discriminatory practices have been less prevalent in the economy 20 years ago.
    Keywords: Gender gap, happiness, well-being, discrimination, life satisfaction
    JEL: I31 J16
    Date: 2007–04
  14. By: Alpizar, Francisco (Environment for Development Center, Tropical Agricultural and Higher Education Center (CATIE)); Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Johansson-Stenman, Olof (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: We investigate the importance of the social context for people’s voluntary contributions to a national park in Costa Rica, using a natural field experiment. Some subjects make actual contributions while others state their hypothetical contribution. Both the degree of anonymity and provided information about the contributions of others influence subject contributions in the hypothesized direction. We do find a substantial hypothetical bias with regard to the amount contributed. However, the influence of the social contexts is about the same when the subjects make actual monetary contributions as when they state theirhypothetical contributions. Our results have important implications for validity testing of stated preference methods: a comparison between hypothetical and actual behavior should be done for a given social context. <p>
    Keywords: Environmental valuation; stated preference methods; voluntary contributions; anonymity; conformity; natural field experiment
    JEL: C93 Q50
    Date: 2007–04–19
  15. By: Fernando Aguiar; Pablo Branas-Garza; Maria Paz Espinosa; Luis M. Miller (Max Planck Institute of Economics Jena, Strategic Interaction Group)
    Abstract: This paper aims to analize the role of personal identity in decision making. To this end, it starts by reviewing critically the growing literature on economics and identity. Considering the ambiguities that the concept of social identity poses, our proposal focuses on the concept of personal identity. A formal model to study how personal identity enters in individuals’ utility function when facing a Dictator Game decision is then presented. Finally, this "identity-based" utility function is studied experimentally. The experiment allows us to study the main parameters of the model, suggesting that we should move with caution when attributing identities to individuals.
    Keywords: personal identity, dictator game, game theory, experiments
    JEL: A13 C72 C91
    Date: 2007–04–20

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