Social capital, resilience and regional diversification in Italy

This paper investigates the role of social capital for the entry and exit of industries in Italian provinces between 2004 and 2010. Results show that bridging social capital positively contributes to the net entry of new industries, especially when they are unrelated to existing specializations in a region, but it loses its impact on regional diversification during the economic crisis. Bonding social capital, instead, makes regions resilient in times of crisis, by reducing the probability of exit of industries. However, bonding social capital is also bad for regional resilience, as it keeps on having a negative impact on the entry of new industries in regions during an economic downturn.