SOCIAL COHESION AND ECONOMIC GROWTH AN EMPIRICAL ANALYSIS OF DEVELOPING AND DEVELOPED COUNTRIES

Abstract

Social cohesion has a significance role to determine the economic growth. As economic growth is only not affected by economic factor, but also affected by non-economic factors. These non-economic factors are social relations, religious, cultural norms and societal values. The aim of the study is to explore the relationship of social cohesion and economic growth by using the panel data of developed and developing countries. The study is carried out by utilizing the six comprehensive indices of social cohesion such as civic activism, intergroup cohesion, members of clubs and associations, interpersonal trust and safety, gender equality, inclusion of minorities and social cohesion averages (average of all indicators) which covers a large number of social indicators. For spatial analysis, we use the geographical information system to show the tendency of social cohesion over the time. For empirical analysis one-way .fixed effect and one-way random effect model is carried out. Our findings support that all indices of social cohesion is significant and positively related to economic growth in developed countries while in developing countries all indices are not behave same such as civic activism, intergroup cohesion has positive and significant, membership of clubs and associations and interpersonal safety and trust has negative and significant impact, and gender equality and inclusion ~f minorities is positive but insignificant. Further, it is also noted that social cohesion average is positive and significant in both developing and developed countries.