The Effects of Social Organizations on Economic Performance- A Panel Study on China

Abstract: A large number of literatures and practitioners have investigated the relationship between social associations and the aggregate economic performance. Most of the studies have confirm the positive effect of social associations on economic performance in the democratic world. However, even though the social organization in China has been in rapid development, similar studies concerning China remain insufficient. This study examines the effectiveness of social organizations on provincial economic performance in China by using panel data for 31 provinces from 2002 to 2013. Several econometrics techniques have been utilized in this study including First Difference Method and Fixed Effect Panel Model. The results from the panel model revealed the positive effect of social group on provincial economic performance in China. Also, the effectiveness of social group is different four groups of provinces according to their level of development. Nevertheless, this study has confirmed the arguments in Social Capital theory that the effectiveness of social organization is highly contextual.