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Title: Regional social capital and the accumulation of physical capital by informal enterprises in India

Authors: Dinesh Rajput; Binilkumar Amarayil Sreeraman

Addresses: Department of Finance and Economics, Indian Institute of Management Mumbai, Vihar Lake, Mumbai-400087, India ' Department of Finance and Economics, Indian Institute of Management Mumbai, Vihar Lake, Mumbai-400087, India

Abstract: This research examines the influence of regional social capital on the acquisition of physical capital by informal enterprises in India. The research analyses regional structural (bridging) social capital, regional relational (bonded) social capital, and regional cognitive social capital. We have employed data gathered over 15 years from three separate rounds of NSSO regarding informal enterprises in India. We utilised a pseudo-panel methodology developed by Deaton (1985) to examine the longitudinal impacts of regional social capital on the accumulation of physical capital, employing a robust standard error model with fixed effects. This is an innovative effort to measure regional social capital in Indian districts and its influence on informal enterprises. Our findings demonstrate that regional structural (bridging) social capital and regional cognitive social capital positively influence the formation of physical capital in informal enterprises. Nevertheless, regional relational (bonded) social capital hinders the creation of physical capital by informal enterprises.

Keywords: social capital; physical capital; informal sector; pseudo panel; fixed effect model; Indian enterprises; India.

DOI: 10.1504/IJICBM.2026.152923

International Journal of Indian Culture and Business Management, 2026 Vol.37 No.5, pp.1 - 19

Received: 25 Aug 2025
Accepted: 17 Feb 2026
Published online: 14 Apr 2026 *