Work detail

Social Cohesion and Growth

Author: Bc. Milan Frydrych
Year: 2014 - summer
Leaders: prof. Roman Horváth Ph.D.
Work type: Bachelors
Language: English
Pages: 49
Awards and prizes: B.A. with distinction from the Dean of the Faculty of Social Sciences for an extraordinarily good bachelors diploma thesis.
Abstract: In this thesis, we examine the effect of social cohesion on economic growth. As a
measure of social cohesion, we use Social Cohesion Index that combines several
data sources into one comprehensible index covering 155 countries. We deal
with model uncertainty and endogeneity of social cohesion at the same time
by employing Bayesian model averaging together with two-stage least square
estimation. Considering more than twenty regressors for fifty-three countries,
we show that social cohesion has a positive effect on economic growth. We
perform a prior sensitivity analysis to assess variability of social cohesion across
different prior structures. As a robustness check, we include Rule of Law and
Integration variables into our model and estimate it with Instrumental Variable
Bayesian Model Averaging (IVBMA) methodology to cope with a considerable
degree of instrument uncertainty. The results suggest that social cohesion is
indeed a vital determinant of economic growth.


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