Do Social Relations Affect Economic Welfare? A Microeconomic Empirical Analysis

Over the last few years, many studies have shown that social networks affect the socioeconomic development. This paper presents evidence, through the Italian microdata representative of the entire Italian population, that the quality and quantity of interpersonal relations of agents can increase their economic welfare. Two proxies of interpersonal relations at an individual level are considered: a proxy for the density and one for the quality of network structure of personal contacts. Both seem to have a positive effect on the level of household economic welfare of agents. This result proves robust to the inclusion of a variety of control variables and to the use of different econometric methods.Networks, Social Interactions, Household Economic Welfare, Microdata, Fuzzy Logic

Motivations to volunteer and social capital: the role of intrinsic motivations in promoting networks of cooperative relations

Although intrinsic motivations receive increasing attention in explaining human actions, our knowledge on their causes and effects is incomplete. Quite surprisingly, the existing literature fails to consider the relationship between intrinsic motivations and social capital formation. The present paper increases understanding on the effect of intrinsic motivations by studying the role that different motivations to volunteer have on the creation of volunteers’ social capital which is intended as networks of cooperative relations. Our empirical analysis considers three indices of social capital, aimed at measuring both the quantitative (number) and the qualitative (degree of familiarity and cooperation) character of social relations, and intrinsic and extrinsic motivations to volunteer (ideal motivations, the desire to feel useful to others, the pursuit of social recognition and the desire to increase the number of acquaintances or friends). We find that the creation of social capital through participation in voluntary associations is not indifferent to the motivations which induced the volunteer to start his/her unpaid activity. In particular, we show that intrinsic motivations enable people to extend their social networks by creating relations characterized by a significant degree of familiarity. By contrast, extrinsic motivations, and in particular the decision to join an association in order to increase the number of acquaintances or friends, promote the creation of networks from a quantitative point of view, but they do not facilitate the creation of relations based on a particular degree of confidence.Intrinsic Motivations, Social Capital, Volunteer Work, Social Networks

Does virtuous circle between social capital and CSR exist? A “network of games” model and some empirical evidence

Social capital and corporate social responsibility (CSR) have received increasing attention in research on the role that elements such as trust, trustworthiness and social norms of reciprocity and cooperation may have in promoting socio-economic development. Although social capital and CSR seem to have features in common, their relationship has not yet been analysed in depth. This paper investigates the idea of a virtuous circle between the level of social capital and the implementation of CSR practices that fosters the creation of cooperative networks between the firm and all its stakeholders. By using both a theoretical approach developed by considering tools of network analysis and psychological game theory and an empirical approach based on original evidence from three case studies, this study shows the role that cognitive social capital (understood as a disposition to conform with ethical principles of cooperation) and the adoption of CSR practices may have in promoting the emergence of sustainable networks of relations between the firm and all its stakeholders (structural social capital).Social capital, Corporate Social Responsibility, Social norms, Network, Cooperation, Trust

A Theoretical Analysis of the Relationship between Social Capital and Corporate Social Responsibility: Concepts and Definitions

Trust, trustworthiness and ethical norms of reciprocity and cooperation have been receiving more and more attention in economic analysis. In particular, two concepts have been widely used in order to study the socio-economic effects of these factors: the concept of social capital (hereafter also SC) and of corporate social responsibility (hereafter also CSR). Even though SC and CSR seem to be linked by many common elements related to the quality and quantity of social relations between agents, their relationship has not been deeply investigated yet. This paper is aimed at shedding light on some aspects of this relationship, in particular, by investigating the idea of a virtuous circle, between the level of SC and the implementation of CSR practices, that fosters socio-economic development by generating social inclusion and social networks based on trust and trustworthiness. Following the literature on SC that stresses its multidimensional character (e.g. Paldam 2000), we consider two dimensions of this notion. Starting from the distinction introduced by Uphoff (1999), we take into account a cognitive and a structural idea of SC. The first one essentially refers to the dispositional characters of agents that affect their propensity to behave in different ways. The latter refers to social networks connecting agents. With regard to the concept of CSR, we adopt a contractarian approach and consider CSR as an extended model of corporate governance, based on the fiduciary duties owed to all the firm's stakeholders. Among stakeholders, we distinguish between strong and weak stakeholders. Both these two categories have made specific investments in the firm. However, strong stakeholders are precious for the firm because they bring in strategic assets. They are, for example, skilled workers or institutional investors. On the contrary, weak stakeholders do not bring strategic assets into the firm and firms have material incentives at defecting in the relationship with them. They are, for example, unskilled workers. Considering the notions of cognitive and structural SC and a contractarian approach to CSR, we show that: a) the level of cognitive SC plays a key role in inducing the firm to adopt and observe CSR practices that respect all the stakeholders; b) the decision of adopting formal instruments of CSR contributes to create cognitive SC that is endogenously determined in the model; c) the level of cognitive SC and the decision of adopting CSR practices creates structural SC in terms of a long term relationship between the firm and the weak and strong stakeholders.social capital, social norms, reputation, CSR, reciprocity, network, trust

The Sources of Happiness: Evidence from the Investment Game

The present paper draws on data collected in an investment game plus a questionnaire to investigate whether happiness is affected by circumstances and/or outcomes of the game and to evaluate which motivations or preference structures (self-interested preferences, inequity aversion, altruism, warm glow, social-welfare preferences, trust or reciprocity) may explain such effect. Our result shows that the amount sent has significant and positive effect on trustors’ self-declared happiness. We interpret this finding by arguing that the happiness effect can be explained by the enactment of the “generating” (social welfare enhancing) power of the trustor’s decision. Characteristics of the investment game are such that the trustor has a value creating while the trustee only a redistributive power. This difference may explain why only trustors and not trustees are significantly and positively affected by their giving decision.Happiness, Investment Game, Social-welfare Preferences

Modeling Cognitive Social Capital and Corporate Social Responsibility (CSR) as Preconditions for Sustainable Networks of Relations

The paper studies the relationship between social capital (SC) and Corporate Social Responsibility (CSR) by investigating the idea of a virtuous circle between the level of SC and the implementation of CSR practices that favours the creation of cooperative networks between the firm and all its stakeholders by promoting the spread of social norms of trust, trustworthiness and cooperation. Following the literature on SC that stresses its multidimensional character (e.g. Paldam 2000), we consider two dimensions of this notion. Starting from the distinction introduced by Uphoff (1999), we take into account a cognitive and a structural idea of SC. The first one essentially refers to the dispositional characters of agents that affect their propensity to behave in different ways. The latter refers to social networks connecting agents.With regard to the concept of CSR, we adopt a contractarian approach and consider CSR as an extended model of corporate governance, based on the fiduciary duties owed to all the firm's stakeholders. Among stakeholders, we distinguish between strong and weak stakeholders. Both these two categories have made specific investments in the firm. However, strong stakeholders are precious for the firm because they bring in strategic assets. They are, for example, skilled workers or institutional investors. On the contrary, weak stakeholders do not bring strategic assets into the firm and firms have material incentives at defecting in the relationship with them. They are, for example, unskilled workers. By using the tools of psychological game theory, the paper shows the role of cognitive social capital and the adoption of CSR practices in promoting the emergence of social norms of trust, trustworthiness and cooperation which favour the creation of cooperative networks between the firm and all its stakeholders (structural social capital). In particular, we show that: a) the level of cognitive SC plays a key role in inducing the firm to adopt and observe CSR practices that respect all the stakeholders; b) the decision of adopting formal instruments of CSR contributes to create cognitive SC that is endogenously determined in the model; c) the level of cognitive SC and the decision of adopting CSR practices creates structural SC in terms of a long term relationship between the firm and the weak and strong stakeholders.

The effect of corporate social responsibility on social capital creation: an empirical study on participation in social cooperatives

This paper analysis the effect of corporate social responsibility on social capital by carrying out an empirical study on a specific kind of nonprofit organizations: the social cooperatives. With respect to the previous studies on the relationship between participation in nonprofit organizations and creation of social capital, this contribution reveals two main reasons of interest. The first one concerns the indices of social capital. In particular this paper takes into account all the three main dimensions which characterize the concept of social capital according to the existing literature by analysing the notion of social capital in terms of: relational networks, generalized trust and relational skills. Secondly, this paper considers the operational characteristics of nonprofit organizations and shows the importance of some managerial decisions in fostering the creation of social capital. Two main findings are presented: i) a positive impact of the participation in social cooperatives on all the dimensions of membersÕ social capital ii) a positive effect of the adoption of CSR good practices on the social capital creation.Social capital, corporate social responsibility, social cooperatives

A theoretical analysis of the relationship between social capital and corporate social responsibility: concepts and definitions

The paper studies the relationship between social capital (SC) and Corporate Social Responsibility (CSR) by investigating the idea of a virtuous circle, between the level of SC and the implementation of CSR practices, that fosters socio-economic development by generating social inclusion and social networks based on trust and trustworthiness. Following the literature on SC that stresses its multidimensional character, both a cognitive and a structural idea of SC are considered. The first one essentially refers to the dispositional characters of agents that affect their propensity to behave in different ways. The latter refers to social networks connecting agents. With regard to the concept of CSR, a contractarian approach is adopted and CSR is considered as an extended model of corporate governance, based on the fiduciary duties owed to all the firm’s stakeholders. Among stakeholders, a original distinction between “strong” and “weak” stakeholders is introduced. The key element that allows to distinguish between strong and weak stakeholders concerns the consequences that the break in the relationship with the firm produces both on the stakeholder and on the firm. Both these two categories have made specific investments in the firm. However, strong stakeholders are precious for the firm because they bring in strategic assets. On the contrary, weak stakeholders do not bring strategic assets into the firm and firms have material incentives at defecting in the relationship with them. Considering the notions of cognitive and structural SC, a contractarian approach to CSR and the distinction between weak and strong stakeholders, the paper shows that: a) the level of cognitive SC plays a key role in inducing the firm to adopt and observe CSR practices that respect all the stakeholders; b) the decision of adopting formal instruments of CSR contributes to create cognitive SC that is endogenously determined in the model; c) the level of cognitive SC and the decision of adopting CSR practices creates structural SC in terms of a long term relationship between the firm and the weak and strong stakeholders.Social capital, Corporate Social Responsibility, Social network, Ideal utility, Cooperation, Trust.

Getting a Job through Voluntary Associations: the Role of Network and Human Capital Creation

The present paper draws on an original dataset collected by the author to investigate if: i)the relational network and the human capital developed by unemployed volunteers through their associational membership are useful in finding a job; ii)the likelihood to get a job is higher for volunteers who take part in activities capable of increasing social networks and human capital. Data show that a considerable percentage of volunteers (24%) who were out of work when they joined their association obtained a job thanks to their associational participation. In particular, personal declarations of unemployed respondents reveal that 12% of them found a job thanks to the skills developed by working in the association, 10% thanks to information received by people met through the association and 2% for other reasons concerning the associational membership. Moreover, the econometric analysis shows that some activities related to the creation of social network (the frequency of participation in informal meetings and work groups) and human capital (the attendance at training courses) positively and significantly affect the probability to get a job if unemployed.Voluntary Associations; Job Opportunities; Social Network; Human Capital

Social relations and economic welfare at an individual level

Over the last few years, many studies have shown that social networks are important to the economic progress and the development of societies. In order to explain the determinants of social network formation, it is important to understand the motivations characterising the decisions of single agents with respect to their social behaviour. This paper presents evidence, through Italian microdata representative of the entire Italian population, that the quality and quantity of interpersonal relations of agents can increase their economic welfare. The analysis proposed seems to indicate that individuals also have an economic incentive to invest in social relations. Two proxies of interpersonal relations at an individual level are used. The first one, that is considered as a proxy for formal social relations, reflects the propensity of individuals to participate in different groups. The second one, that is interpreted as a proxy for the informal social relations, reflects the level of satisfaction of personal relationships of single agents with friends. This proxy is very useful to capture the quantitative aspects of informal interpersonal relations and the qualitative ones. Both formal and informal social relations of single agents seem to have a positive effect on their level of household economic welfare. This result proves robust to the inclusion of a variety of control variables and the use of different econometric methods.social interactions, social relations and economic welfare