ABSTRACT
This chapter elaborate theories about the relationship between social capital and racial and ethnic diversity. A review of the literature on social capital and business civic engagement follows. The chapter describes the research design, concept operationalizations, and findings. It also discusses the implications of the findings for social capital theory and for new destination towns. Social capital is a important resource for rural prairie towns. Social capital is essential for rural community development because of its association with civic engagement. Contact theory and threat theory predicts how social capital might be impacted by the ethnic and racial diversity of communities. Ethnic diversity is negatively associated with bridging and bonding social capital and business civic engagement. Business civic engagement, bonding social capital, and bridging social capital were measured with indices calculated using principal component factor analysis with varimax rotation. The scales were created at the individual level of analysis and aggregated as community means.
