This study explores the impact of social capital on entrepreneurial activities by using pseudo-panel approach constructed at an age-based cohort level. We assess the effects of social capital, in forms of generalized and institutional trust, civic norms, and networks through associational activities, on entrepreneurship using cohort panel data derived from the World Values Survey (WVS). Moreover, we construct a measure of social capital that incorporates all of these three dimensions. The data from the WVS covers five periods (1990, 1995, 2000, 2005 and 2010) and includes a cross section of 40 countries. The findings indicate that trust measured by either generalized or institutional trust encourages entrepreneurship. Evidence suggests that stronger civic norms positively influence entrepreneurship, whereas participating associational activities has negative impact on entrepreneurship due to over-embeddedness. We also find evidence that a multidimensional measure of social capital is needed for linking social capital to entrepreneurship.
Key words: Entrepreneurship, social capital, trust, pseudo-panel approach. JEL Codes: J24, O43, O50, Z13 Article Language: EnglishTurkish
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