Does internet stimulate the accumulation of social capital? A macro-perspective from Australia

Salahuddin, Mohammad and Tisdell, Clem and Burton, Lorelle and Alam, Khorshed (2016) Does internet stimulate the accumulation of social capital? A macro-perspective from Australia. Economic Analysis and Policy, 49. pp. 43-55. ISSN 0313-5926

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Based on the premise that the Internet has the potential to generate trust, this study estimates the effects of the Internet and real GDP per capita on the creation of social capital (measured by trust) for Australia for the period 1985-2013. We use ARDL bounds testing approach (Pesaran et
al. 2001) to estimate the short- and long-run relationship and Granger (1969) causality test to assess the causal linkages among the variables. Findings indicate that Internet use reduces social capital in the long-run but contributes slightly to its enhancement in the short-run. There is positive significant association between the level of real GDP per capita and the stock of social capital in the long-run while the relationship in the short-run is negative and significant. No causal link is found between Internet use and social capital while a unidirectional causality running from social capital to real GDP per capita is observed. The negative association between
Internet use and the formation of social capital in the long-run may occur because the trust generated through greater online interaction is outweighed by the loss in trust arising from reduced face to face interaction.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Accepted version deposited in accordance with the copyright policy of the Publisher.
Faculty / Department / School: Current - Faculty of Business, Education, Law and Arts - School of Commerce
Date Deposited: 17 Dec 2015 00:22
Last Modified: 17 May 2017 04:41
Uncontrolled Keywords: ARDL, Australia, economic growth, social capital, Granger causality, internet usage
Fields of Research : 08 Information and Computing Sciences > 0806 Information Systems > 080602 Computer-Human Interaction
14 Economics > 1402 Applied Economics > 140202 Economic Development and Growth
14 Economics > 1403 Econometrics > 140305 Time-Series Analysis
Identification Number or DOI: 10.1016/j.eap.2015.11.011

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