Social Capital and Innovation in East Asia

Abstract

This paper investigates the relationship between social capital and innovation in high-performing East Asian economies. Rapid economic growth and innovation in these economies contradicts the presumed positive link between social trust and innovation suggested in the literature, as these economies are often characterized as low-trust societies. The results of the multilevel analyses conducted in this paper show that social trust among individuals is not a driving force of innovation in East Asia. Instead, other elements of social capital—shared social norms of supporting collective developmental goals and trust in formal institutions—are more important determinants of innovation. This finding reveals the region-specific developmental path of East Asia—states set innovation and growth as common goals for society and played an active role in initiating and coordinating efforts to achieve them.