Impact of Global Financial Crisis on Social Capital: An empirical study

The study was conducted to evaluate the impact of the global financial crisis on social capital formation in Malaysia in 2009. The results are based on data collected from survey of Malaysian low-income households carried out in January 2010. The study employed a multiplicity of econometric and statistical techniques to identify factors that influenced social capital declination, which appears to yield more credible results. Evidence indicates that the erosion of social capital resulted from the global financial crisis had embedded in the society. The study found that the stock of social capital at the family and community level declined in 2009. The study also found that the intensity of social capital erosion varied across the location; occupation, ethnicity, gender, and education level of household. This study recommends that Malaysia should develop a more comprehensive social safety net which should be in line with the lull in economic growth and changes in the demographic and family structure as well.