The research method applied in this study was a panel data analysis model with a feasible generalized least square approach. This study aims to analyze the factors determining economic growth in ASEAN countries, which are the ASEAN economic community members as a potential center for world economic growth. Nevertheless, the use of the instrumental variable regression method does not change the main result. Anticipating the possibility of endogeneity in the diversity variables, this study uses geographical variables to instrument these variables. Using the multiple linear regression method, the study found that all measures of diversity are negatively associated with trust but are positively associated with tolerance, even after controlling for individual-, household- and district-level characteristics. The study’s main contribution to the literature is the inclusion of ethnic similarities in the construction of these diversity variables using linguistic tree data taken from Ethnologue. The 2009 National Socioeconomic Survey asked almost 300 thousand individuals on social capital from the 2010 population census data used to construct measures of ethnic and religious diversity. This study analyzes the relationship between the various measures of ethnic diversity and social capital in Indonesia, particularly trust and tolerance (towards other religions and other ethnic groups), using a nationally representative survey.
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