  Studies in the social capital literature have documented two stylised facts:
first, a decline in measures of social participation has occurred in many OECD
countries. Second, and more recently, the success of social networking sites
(SNSs) has resulted in a steep rise in online social participation. Our study
adds to this body of research by conducting the first empirical assessment of
how online networking affects two economically relevant aspects of social
capital, i.e. trust and sociability. We address endogeneity in online
networking by exploiting technological characteristics of the pre-existing
voice telecommunication infrastructures that exogenously determined the
availability of broadband for high-speed Internet. We find that participation
in SNSs such as Facebook and Twitter has a positive effect on face-to-face
interactions. However, social trust decreases with online interactions. We
argue that the rising practice of hate speech may play a crucial role in the
destruction of trust.
