Does Social Capital Drive Economic Performance? Empirical Evidence from Southeast Asia
DOI:
https://doi.org/10.24269/ekuilibrium.v21i2.2026.pp542-556Keywords:
social capital, economic performance, panel data, Southeast AsiaAbstract
This study examines the relationship between social capital and economic performance in ASEAN countries, with particular attention to the possibility of a nonlinear effect. While previous studies have generally emphasized the linear contribution of social capital to economic outcomes, empirical evidence regarding its nonlinear influence remains limited, especially in the ASEAN context. Using panel data from nine ASEAN member countries over the period 2012–2024, this study employs panel data regression analysis to investigate the effect of social capital on GDP per capita. Social capital is measured using the social support index from the World Happiness Report, while government effectiveness, military expenditure, female authority, leader age, and the COVID-19 pandemic are included as control variables. The model selection procedure indicates that the Random Effect Model is the most appropriate specification. The empirical findings reveal that social capital has a significant nonlinear effect on economic performance. Specifically, the coefficient of social capital is negative, whereas its squared term is positive and significant, indicating a U-shaped relationship. The estimated turning point is 77.95, suggesting that the economic benefits of social capital emerge only after a sufficiently high level of social support is achieved. In addition, female authority is found to be significantly associated with GDP per capita, while government effectiveness, military expenditure, leader age, and COVID-19 do not exhibit significant effects. These findings suggest that the contribution of social capital to economic performance depends on its level of accumulation and inclusiveness. Strengthening social trust, cooperation, and broader social networks may therefore support sustainable economic development in ASEAN countries.
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