During the general discussion several participants commented on the measurement of social capital. Max St. Brown suggested excluding some components in the construction of the social capital index such as volunteering, which is unlikely to be influencing foreign firms’ location decisions. Wen-Jen Hsieh, on the other hand, proposed including additional variables in the index, such as the regions’ crime rate and the number of civil law suits. Moreover, in her view education is an important component of social capital as a large proportion of FDI tends to flow into the knowledge sector of economies. She suggested using indicators of industry collaboration with universities in the construction of the index. Anwar Nasution asked what the difference was between social capital and institutions as both reduce transaction costs and help overcome market failures.
Other comments during the general discussion related to the estimation. Jie Li, like Nasution, was of the view that...