Love Thy Neighbour: The impact of social cohesion on community economic resilience

This study examines the role of social cohesion in fostering communities’ economic resilience, defined as their ability to positively adjust and maintain economic functioning while facing adversity. Covid-19 caused worldwide disruptions, forcing firms to close overnight as a measure to stop the virus from spreading. However, considerable within-country regional heterogeneity manifested in the impact of the various applied measures. Focusing on organization exits across 379 Dutch municipalities and applying a mixed methods approach, we argue and find that social cohesion – conceptualized as involving kinship and residential stability – increases communities’ economic resilience and that family firms are a conduit through which social cohesion affects economic resilience. Kinship creates the willingness to help other members, even if this means suffering some losses. Residential stability fosters a social infrastructure that is necessary for the quick mobilization of a community’s resources. Family firms mediate the relationship between social cohesion and economic resilience, by leveraging their long-term orientation, strong, community-embedded relationships and internal resources.