The Effect Social Capital on the Economic Status of Urban Centers (Case Study: Central Ring of Hamedan)

Social capital is widely believed to underlie economic development. Social capital is so important in economic development that it can be clearly observed in almost all developed societies. The World Bank defines social capital as the invisible wealth of a country which is composed of all institutions, relations, and norms that contribute to the formation of social interaction. The present study seeks to investigate the effect of the major components of social capital, i.e. social participation, social cohesion, and social trust, on the economic development of a city. The data were collected through a questionnaire and by means of random sampling.
The study aims at improving the economic status of the urban center of Hamedan by means of social capital. The methodology is descriptive-analytical. Data collection methods include library research, questionnaire, and field observation. Simple random sampling method was used to choose 315 subjects from the target population of shopkeepers in the area under investigation. Cronbach's alpha test indicated that the questionnaire had a high reliability. Finally, the data were analyzed through correlation analysis, Pearson correlation coefficient, and regression analysis. The findings suggest that social capital in the area in question is considerably low and we can improve the economic status by increasing social capital.