Tolerance, Cultural Diversity and Economic Growth: Evidence from Dynamic Panel Data Analysis

Osama Alhendi, Jozsef Toth (), Péter Lengyel and Péter Balogh
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Osama Alhendi: Karoly Ihrig Doctoral School of Management and Business, University of Debrecen, 4032 Debrecen, Hungary
Péter Lengyel: Institute of Applied Informatics and Logistics, Faculty of Economics and Business, University of Debrecen, 4032 Debrecen, Hungary
Péter Balogh: Department of Statistics and Methodology, Institute of Statistics and Methodology, Faculty of Economics and Business, University of Debrecen, 4032 Debrecen, Hungary

Economies, 2021, vol. 9, issue 1, 1-16

Abstract: This study aims to examine the impact of social tolerance of cultural diversity, and the ability to speak widely spoken languages, on economic performance. Based on the literature, the evidence is still controversial and unclear. Therefore, the study used panel data relating to (99) non-English speaking economies during the time period between 2009 and 2017. Following the augmented Solow model approach, the related equation was expanded, in this study, to include (besides human capital) social tolerance, the English language (as a lingua franca) and the level of openness. The model was estimated using the two-step system GMM approach. The results show that social tolerance of diversity and English language competence have a positive, but insignificant impact on the economy. Regarding policy implications, government and decision-makers can avoid the costs deriving from cultural diversity by adopting democratic and effective institutions that aim to achieve cultural justice and recognition, which, in turn, enhance the level of tolerance, innovation and productivity in the economy. Moreover, to ease intercultural communication within heterogeneous communities, it is necessary to invest in enhancing the quality of second language education which is necessary to make society more tolerant and the country more open to the global economy.

Keywords: economic growth; social tolerance; cultural diversity; English proficiency; human capital (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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