Does Social Capital Matter for Total Factor Productivity? Exploratory Evidence from Poland

Abstract

Two issues connected with sustainable development are analysed in this article: total factor productivity (TFP), which measures the efficiency of transforming physical capital and labour into production, and social capital, which is increasingly considered as a factor of TFP. TFP is sometimes viewed as a measure of sustainability, and its high value indicates an effective way of combining and using limited resources. Social capital, in turn, is a determining factor in the social, economic, and environmental dimensions of development. The subject of this analysis is the impact of social capital on TFP. Social capital generates synergistic effects and creates added value using the existing resources. Therefore, it is legitimate to regard it as one of the determinants of TFP. The role of social capital in sustainable development is theoretically grounded and confirmed by numerous empirical studies. Nevertheless, due to the deep dependence on the context, the mechanisms of the impact of this capital on economic effects are still not fully understood. In this paper, social capital is analysed in the context of the post-transformation economy. This context seems to be interesting for two reasons: the relative weakness of social capital in post-communist countries and extensive nature of development these countries have experienced in recent decades, which together can be a barrier to long-term growth in these economies. The purpose of the paper is to identify and assess the impact of social capital in Poland on TFP in a regional breakdown (Nomenclature of Territorial Units for Statistics II - NUTS II). The research period covers the years 2002–2016 and employs econometric modelling methods. Social capital turns out to be a factor in explaining the level of TFP in Polish regions.

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“…Poland, placed between two powerful nations of Germany and Russia, has been a space of political conflicts and a safety buffer reducing the aggressors' impulses; this factor determines many social, behavioural, mental and cultural consequences of individuals and the whole nation. The far-reaching conclusion may be drawn here: the Polish nation has a severe problem with planned and constant improvement of social capital, which is seen in old-fashioned education, low participation, high emigration, constant internal fights (Aksiuto, 2019;Markowska-Przybyła, 2020;Markowska-Przybyła & Ramsey, 2016;Vučković & Škuflić, 2021).…”

“…Conversion between publicly-and privateowned assets shapes people's minds, behaviours, and objectives (Huber & Montag, 2020). Researchers explored the quality of social capital among post-communist societiesincluding Poland (Dolšak, 2019;Markowska-Przybyła, 2020;Nicoara, 2018;Soaita & Wind, 2020). Poland, placed between two powerful nations of Germany and Russia, has been a space of political conflicts and a safety buffer reducing the aggressors' impulses; this factor determines many social, behavioural, mental and cultural consequences of individuals and the whole nation.…”

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“…Additionally, it has been widely used as a comprehensive measure of social production efficiency in research on the sources of economic growth and sustainable economic development [17]. The existing literature has focused on macro-TFP [18,19] and micro-TFP [20][21][22], as well as factors that affect TFP, such as capital accumulation [23], R and D and innovation in technology [24,25], international trade and globalization [26], and economic shocks [27,28].…”

Does Polish Post-Communist Cultural Burden Influence the Perception of Creative Identities?

“…Change between publicly-and private-owned resources influences people's minds, behaviors, and goals (Huber & Montag, 2020). Researchers inves�gated the quality of social capital among many post-communist socie�es (Dolšak, 2019;Markowska-Przybyła, 2020;Nicoara, 2018;Soaita & Wind, 2020).…”