In this issue we feature 15 current papers on the theme of social capital, chosen by Fabio Sabatini (Università degli Studi di Roma “La Sapienza”):

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 1. Broadband Internet and Social Capital - Geraci, Andrea; Nardotto, Mattia; Reggiani, Tommaso G.; Sabatini, Fabio 

 2. The Reversal of Fortune, Extractive Institution and the Historical Roots of Racism - Bonick, Matthew; Farfan-Vallespin, Antonio  

 3. Politics in the Facebook Era Evidence from the 2016 US Presidential Elections - Liberini, Federica; Redoano, Michela; Russo, Antonio; Cuevas, Angel; Cuevas, Ruben

 4. Civic Capital and Service Outsourcing: Evidence from Italy - M. B?rker; I. Mammi; G. A. Minerva

 5. Ethnicity and risk sharing network formation: Evidence from rural Viet Nam - Hoang; Laure Pasquier-Doumer; Camille Saint-Macary 

 6. Social Networks and Tax Avoidance: Evidence from a Well-Defined Norwegian Tax Shelter - Annette Alstads?ter; Wojciech Kopczuk; Kjetil Telle 

 7. Connecting to Power: Political Connections, Innovation, and Firm Dynamics - Akcigit, Ufuk; Baslandze, Salom?; Lotti, Francesca 

 8. The Wider Benefits of Adult Learning: Work-Related Training and Social Capital - Ruhose, Jens; Thomsen, Stephan L.; Weilage, Insa 

 9. Unsuccessful subjective well-being assimilation among immigrants: The role of faltering perceptions of the host society -  Martijn Hendriks; Martijn (M.J.) Burger

10. Institutions, Culture, and Wetland Values - Chaikumbung, Mayula; Doucouliagos, Chris; Scarborough, Helen

11. Entrepreneurship and social networks in Spain - I?iguez, David; Ortega, Raquel; Rivero, Alejandro; Velilla, Jorge 12. Somatic Distance; Trust and Trade Jacques Melitz; Farid Toubal

13. Deviant or Wrong? The Effects of Norm Information on the Efficacy of Punishment - Cristina Bicchieri; Eugen Dimant; Erte Xiao;

14. The Institutional Foundations of Religious Politics: Evidence from Indonesia - Samuel Bazzi; Gabriel Koehler-Derrick; Benjamin Marx

15. Spatial Dependence and Social Networks in Regional Labor Migration - Koji Murayama; Jun Nagayasu

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 1. Broadband Internet and Social Capital

   Geraci, Andrea (University of Oxford); Nardotto, Mattia (KU Leuven);

    Reggiani, Tommaso G. (Masaryk University); Sabatini, Fabio (Sapienza

    University of Rome)

  We study how the diffusion of broadband Internet affects social capital

  using two data sets from the UK. Our empirical strategy exploits the fact

  that broadband access has long depended on customers' position in the voice

  telecommunication infrastructure that was designed in the 1930s. The actual

  speed of an Internet connection, in fact, rapidly decays with the distance

  of the dwelling from the specific node of the network serving its area.

  Merging unique information about the topology of the voice network with

  geocoded longitudinal data about individual social capital, we show that

  access to broadband Internet caused a significant decline in forms of

  offline interaction and civic engagement. Overall, our results suggest that

  broadband penetration substantially crowded out several aspects of social

  capital.

   JEL: C91 D9 D91 Z1

   Keywords: ICT, broadband infrastructure, networks, Internet, social

    capital, civic capital

   Date: 2018?09

 URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp11855&r=soc

 

 2. The Reversal of Fortune, Extractive Institution and the Historical

     Roots of Racism

   Bonick, Matthew; Farfan-Vallespin, Antonio

  We show differences in levels of racism within a sample of former European

  colonies can be traced to historical institutions. Our identification

  strategy relies on the reversal of fortune, a historical shock capturing the

  exogenous establishment of different institutions during the onset of

  European colonization. Using both OLS and multilevel analysis, we find,

  extractive historical institutions to be a strong predictor of higher levels

  of racism independent of present and other explanatory factors at the

  individual and country levels. We argue and provide evidence this

  relationship is causal and operates through internal norms, beliefs and

  values.

   JEL: J15 N30 N40 Z10

   Date: 2018

 URL: http://d.repec.org/n?u=RePEc:zbw:vfsc18:181569&r=soc

 

 3. Politics in the Facebook Era Evidence from the 2016 US Presidential

     Elections

   Liberini, Federica (ETH Zurich, Department of Economics); Redoano, Michela

    (University of Warwick); Russo, Antonio (ETH Zurich, Department of

    Economics); Cuevas, Angel (University Carlos III, Department of Telematic

    Engeneering); Cuevas, Ruben (University Carlos III, Department of

    Telematic Engeneering)

  Social media enable politicians to personalize their campaigns and target

  voters who may be decisive for the outcome of elections. We assess the

  effects of such political ?micro-targeting? by exploiting variation in daily

  advertising prices on Facebook, collected during the course of the 2016 U.S.

  presidential campaign. We analyze the variation of prices across political

  ideologies and propose a measure for the intensity of online political

  campaigns. Combining this measure with information from the ANES electoral

  survey, we address two fundamental questions: (i) To what extent did

  political campaigns use social media to micro-target voters? (ii) How large

  was the effect, if any, on voters who were heavily exposed to campaigning on

  social media? We find that online political campaigns targeted on users?

  gender, geographic location, and political ideology had a significant effect

  in persuading undecided voters to support Mr Trump, and in persuading

  Republican supporters to turn out on polling day. Moreover the effect of

  micro-targeting on Facebook was strongest among users without university or

  college-level education.Keywords: JEL Classification:

   Date: 2018

 URL: http://d.repec.org/n?u=RePEc:cge:wacage:389&r=soc

 

 4. Civic Capital and Service Outsourcing: Evidence from Italy

   M. B?rker; I. Mammi; G. A. Minerva

  This paper studies whether civic capital (those persistent shared beliefs

  and values that help a group overcome the free rider problem in the pursuit

  of socially valuable activities) acts an effective restraint against

  opportunistic behavior in transactions by looking at the firm-level degree

  of service outsourcing in Italy. Our results show that firms tend to

  outsource more services in areas where civic capital is higher. We claim

  that the rise in the propensity to engage in transactions with outside

  service suppliers stems from the decrease in opportunism between the parties

  involved. We consider a dynamic specification which allows to disentangle

  state dependence of service out- sourcing from firm-level heterogeneity, and

  we use historical instruments to address the potential endogeneity of civic

  capital.

   JEL: A13 L20 L24 R12

   Date: 2018?11

 URL: http://d.repec.org/n?u=RePEc:bol:bodewp:wp1125&r=soc

 

 5. Ethnicity and risk sharing network formation: Evidence from rural Viet

     Nam

   Hoang (PSL, Universit? Paris-Dauphine, Paris, France, UMR 225 DIAL,

    Institut de Recherche pour le D?veloppement (IRD), Paris, France); Laure

    Pasquier-Doumer (IRD, UMR DIAL, PSL, Universit? Paris-Dauphine); Camille

    Saint-Macary (IRD, UMR DIAL, PSL, Universit? Paris-Dauphine)

  Ethnic inequality remains a persistent challenge for Viet Nam. This paper

  aims at better understanding this ethnic gap through exploring the formation

  of risk sharing networks in rural areas. It first investigates the

  differences in risk sharing networks between the ethnic minorities and the

  Kinh majority, in terms of size and similarity attributes of the networks.

  Second, it relies on the concept of ethnic homophily in link formation to

  explain the mechanisms leading to those differences. In particular, it

  disentangles the effect of demographic and local distribution of ethnic

  groups on risk-sharing network formation from cultural and social distance

  between ethnic groups, while controlling for the disparities in the

  geographical environment. Results show that ethnic minorities have smaller

  and less diversified networks than the majority. This is partly explained by

  differences in wealth and in the geographical environment. But ethnicity

  also plays a direct role in risk-sharing network formation through the

  combination of preferences to form a link with people from the same ethnic

  group (inbreeding homophily) and the relative size of ethnic groups

  conditioning the opportunities to form a link (baseline homophily).

  Inbreeding homophily is found to be stronger among the Kinh majority,

  leading to the exclusion of ethnic minorities from Kinh networks, which are

  supposed to be more efficient to cope with covariant risk because they are

  more diversified in the occupation and location of their members. This

  evidence suggests that inequalities among ethnic groups in Viet Nam are

  partly rooted in the cultural and social distances between them.

   JEL: O12 I31 D85

   Keywords: Risk-sharing network, homophily, ethnic gap, Viet Nam, Vietnam.

   Date: 2018

 URL: http://d.repec.org/n?u=RePEc:dia:wpaper:dt201815&r=soc

 

 6. Social Networks and Tax Avoidance: Evidence from a Well-Defined

     Norwegian Tax Shelter

   Annette Alstads?ter; Wojciech Kopczuk; Kjetil Telle

  In 2005, over 8% of Norwegian shareholders transferred their shares to new

  (legal) tax shelters intended to defer taxation of capital gains and

  dividends that would otherwise be taxable in the aftermath of 2006 reform.

  Using detailed administrative data we identify family networks and describe

  how take up of tax avoidance progresses within a network. A feature of the

  reform was that the ability to set up a tax shelter changed discontinuously

  with individual shareholding of a firm and we use this fact to estimate the

  causal effect of availability of tax avoidance for a taxpayer on tax

  avoidance by others in the network. We find that take up in a social network

  increases the likelihood that others will take up. This suggests that

  taxpayers affect each other's decisions about tax avoidance, highlighting

  the importance of accounting for social interactions in understanding

  enforcement and tax avoidance behavior, and providing a concrete example of

  ?optimization frictions? in the context of behavioral responses to taxation.

   JEL: D22 D23 H25 H26 H32

   Date: 2018?10

 URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:25191&r=soc

 

 7. Connecting to Power: Political Connections, Innovation, and Firm

     Dynamics

   Akcigit, Ufuk; Baslandze, Salom?; Lotti, Francesca

  Do political connections affect firm dynamics, innovation, and creative

  destruction? We study Italian firms and their workers to answer this

  question. Our analysis uses a brand-new dataset, spanning the period from

  1993 to 2014, where we merge: (i) firm-level balance sheet data; (ii) social

  security data on the universe of workers; (iii) patent data from the

  European Patent Office; (iv) the national registry of local politicians; and

  (v) detailed data on local elections in Italy. We find that firm-level

  political connections are widespread, especially among large firms, and that

  industries with a larger share of politically connected firms feature worse

  firm dynamics. We identify a leadership paradox: When compared to their

  competitors, market leaders are much more likely to be politically

  connected, but much less likely to innovate. In addition, political

  connections relate to a higher rate of survival, as well as growth in

  employment and revenue, but not in productivity - a result that we also

  confirm using a regression discontinuity design. We build a firm dynamics

  model, where we allow firms to invest in innovation and/or political

  connection to advance their productivity and to overcome certain market

  frictions. Our model highlights a new interaction between static gains and

  dynamic losses from rent-seeking in aggregate productivity.

   JEL: D7 O3 O4

   Keywords: creative destruction; Firm Dynamics; Innovation; Political

    Connections; productivity

   Date: 2018?10

 URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:13216&r=soc

 

 8. The Wider Benefits of Adult Learning: Work-Related Training and Social

     Capital

   Ruhose, Jens (Leibniz University of Hannover); Thomsen, Stephan L.

    (Leibniz University of Hannover); Weilage, Insa (Leibniz University of

    Hannover)

  We propose a regression-adjusted matched difference-in-differences framework

  to estimate non-pecuniary returns to adult education. This approach combines

  kernel matching with entropy balancing to account for selection bias and

  sorting on gains. Using data from the German SOEP, we evaluate the effect of

  work-related training, which represents the largest portion of adult

  education in OECD countries, on individual social capital. Training

  increases participation in civic, political, and cultural activities while

  not crowding out social participation. Results are robust against a variety

  of potentially confounding explanations. These findings imply positive

  externalities from work-related training over and above the well-documented

  labor market effects.

   JEL: J24 I21 M53

   Keywords: non-pecuniary returns, social capital, work-related training,

    matched difference-in-differences approach, entropy balancing

   Date: 2018?09

 URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp11854&r=soc

 

 9. Unsuccessful subjective well-being assimilation among immigrants: The

     role of faltering perceptions of the host society

   Martijn Hendriks (Erasmus University Rotterdam); Martijn (M.J.) Burger

    (Erasmus University Rotterdam)

  Immigrants in developed countries typically fail to assimilate in terms of

  subjective well-being, meaning that their happiness and life satisfaction do

  not substantially increase with their length of stay or across generations,

  and therefore their subjective well-being remains lower than that of

  natives. This contrasts with migrants? own expectations and the predictions

  of straight-line assimilation theory, along with the general improvement of

  immigrants? objective living conditions with their length of stay. Using

  European Social Survey data, we show that the subjective well-being

  assimilation of first-generation immigrants in developed European countries

  is impaired by the gradual development of less positive perceptions of the

  host country?s economic, political, and social conditions. These faltering

  societal perceptions particularly affect immigrants whose societal

  conditions strongly improved by migration and immigrants who arrived after

  childhood. Faltering societal perceptions continue to impair subjective

  well-being assimilation across generations. However, compared with natives,

  first-generation immigrants derive a subjective well-being advantage from

  their more positive societal perceptions. We attribute these findings to

  immigrants? growing aspirations and expectations that follow from their

  habituation to better conditions in their host country and fewer (more)

  comparisons to inferior (better) conditions of the people in their home

  (host) country. Our findings suggest that delaying or decelerating the

  process of immigrants? faltering societal perceptions is a promising pathway

  to improved subjective well-being assimilation and reduced frustration about

  their perceived lack of progress.

   JEL: I31 F22

   Keywords: subjective well-being; migration; assimilation; aspirations;

    expectations

   Date: 2018?10?28

 URL: http://d.repec.org/n?u=RePEc:tin:wpaper:20180080&r=soc

 

10. Institutions, Culture, and Wetland Values

   Chaikumbung, Mayula (Kasetsart University); Doucouliagos, Chris (Deakin

    University); Scarborough, Helen (Deakin University)

  Do institutions and culture affect environmental values? In this article we

  analyze 1,041 environmental valuations of 223 wetlands in 38 developing

  countries, to examine the effect of institutions and culture on

  environmental values. We assess three dimensions of institutional quality:

  economic freedom, democracy, and good governance. We also consider the

  impact of cultural differences. Possibly surprisingly, wetland values are

  lower in more market based economies and they are lower in cultures that are

  more indulgent and authoritarian. In contrast, improved government

  effectiveness increases wetland valuations. Understanding these important

  and varying effects of institutions and culture on wetland valuations is

  important for policy development and environmental preservation.

   JEL: Q3 H4 O13 P48

   Keywords: institutions, culture, wetlands, valuations, environmental

    preferences, meta-regression

   Date: 2018?09

 URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp11848&r=soc

 

11. Entrepreneurship and social networks in Spain

   I?iguez, David; Ortega, Raquel; Rivero, Alejandro; Velilla, Jorge

  The objective of the work is to know the behavior of new Spanish companies

  in social networks and the use they make of them, trying to establish

  relationships between the type of company and its behavior in the digital

  world. We obtain information on the almost 30,000 companies constituted

  between October 1, 2016 and September 30, 2017 from the Official Bulletin of

  the Mercantile Registry (BORME), using the classification of economic

  activities CNAE when defining the type of company. The newly created

  companies show interest in visualizing themselves in social networks, 36% in

  Facebook, 23% in LinkedIn and 15% in Twitter, detecting also activity in

  Instagram and YouTube for some particular niches, being the commercial

  activity (Group C of CNAE) the predominant in the presence of new Spanish

  companies in social networks.

   JEL: L26

   Keywords: Entrepreneurship, New Companies, Social Networks, Spain,

    Facebook, LinkedIn, Twitter

   Date: 2018

 URL: http://d.repec.org/n?u=RePEc:pra:mprapa:89652&r=soc

 

12. Somatic Distance; Trust and Trade

   Jacques Melitz (CREST; ENSAE; CEPII); Farid Toubal (CREST; ENS de

    Paris-Saclay; CEPII)

  Somatic distance; or differences in physical appearance; proves to be

  extremely important in the gravity model of bilateral trade in conformity

  with results in other areas of economics and outside in the social sciences.

  This is also true independently of survey evidence about bilateral trust.

  These findings are obtained in a sample of the 15 members of the European

  Economic Association in 1996. Robustness tests also show that somatic

  distance; as well as co-ancestry; has a more reliable influence on bilateral

  trade than the other cultural variables. The article finally discusses the

  interpretation and breadth of application of these results.

   JEL: F10 F40 Z10

   Keywords: Somatic distance, Cultural interactions, Co-ancestry, Trust,

    Language, Bilateral Trade.

   Date: 2018?08?01

 URL: http://d.repec.org/n?u=RePEc:crs:wpaper:2018-11&r=soc

 

13. Deviant or Wrong? The Effects of Norm Information on the Efficacy of

     Punishment

   Cristina Bicchieri; Eugen Dimant (Philosophy, Politics and Economics,

    University of Pennsylvania); Erte Xiao;

  A stream of research examining the effect of punishment on conformity

  indicates that punishment can backfire and lead to suboptimal social

  outcomes. We examine whether this effect originates from a lack of perceived

  legitimacy of rule enforcement, enabling agents to justify selfish behavior

  to themselves. We address the question of punishment legitimacy by shedding

  light upon the importance of social norms and their interplay with

  punishment. Often people are presented with incomplete norm information:

  either about what most others do (empirical) or what most others deem

  appropriate (normative). We show that neither punishment nor

  empirical/normative information in isolation result in prosocial behavior.

  In turn, we find that prosociality is significantly increased when normative

  information and punishment are combined, but only when compliance is

  relatively cheap. When compliance is more expensive, we find that the

  combination of punishment and empirical information about others? conformity

  can have detrimental effects on prosocial behavior. We attribute this

  outcome to the differential ability to distort one?s own beliefs about

  applicable norms. Our results have important implications for researchers

  and practitioners alike.

   JEL: C91 D03 D73 H26

   Keywords: Conformity, Experiments, Punishment, Social Norms, Trust Game

   Date: 2018?10

 URL: http://d.repec.org/n?u=RePEc:ppc:wpaper:0016&r=soc

 

14. The Institutional Foundations of Religious Politics: Evidence from

     Indonesia

   Samuel Bazzi; Gabriel Koehler-Derrick; Benjamin Marx

  Why do religious politics thrive in some societies but not others? This

  paper explores the institutional foundations of this process in Indonesia,

  the world?s largest Muslim democracy. We show that a major Islamic

  institution, the waqf, fostered the entrenchment of political Islam at a

  critical historical juncture. In the early 1960s, rural elites transferred

  large amounts of land into waqf?a type of inalienable charitable trust?to

  avoid expropriation by the government as part of a major land reform effort.

  Although the land reform was later undone, the waqf properties remained. We

  show that greater intensity of the planned reform led to more prevalent waqf

  land and Islamic institutions endowed as such, including religious schools,

  which are strongholds of the Islamist movement. We identify lasting effects

  of the reform on electoral support for Islamist parties, preferences for

  religious candidates, and the adoption of Islamic legal regulations

  (sharia). Overall, the land reform contributed to the resilience and

  eventual rise of political Islam by helping to spread religious

  institutions, thereby solidifying the alliance between local elites and

  Islamist groups. These findings shed new light on how religious institutions

  may shape politics in modern democracies.

   JEL: D72 D74 P16 P26 Z12

   Date: 2018?10

 URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:25151&r=soc

 

15. Spatial Dependence and Social Networks in Regional Labor Migration

   Koji Murayama; Jun Nagayasu

  This study empirically analyzes the determinants of regional labor migration

  in Japan. Using spatial models of origin-destination flows and considering

  the network effects of labor, we obtain results more consistent with

  standard migration theory than previous studies. First, unlike prior

  research, we find that migration decisions are made by economic motivations

  consistent with economic theories. In particular, the unemployment rate in

  the destination region and income in the origin are found to be driving

  forces of labor migration. Second, we report that network effects, which

  help reduce migration costs, have encouraged the relocation of labor. Third,

  by using several de nitions of spatial weights, we show that spatial

  dependence in regional migration is more complex than what previous studies

  assumed.

   Date: 2018?10

 URL: http://d.repec.org/n?u=RePEc:toh:dssraa:88&r=soc

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