Culture Matters: A Test of Rationality on Economic Growth

Joseph Forson, Jakkaphong Janrattanagul and Emmanuel Carsamer Carsamer

MPRA Paper from University Library of Munich, Germany

Abstract: There are widespread debates as to whether cultural values have a bearing on economic growth. Scholarly articles have actually had conflicting results with proponents arguing there is whiles opponents have thought otherwise. The aim of this paper is to verify the assertions made by these two schools of thought from the perspective of culture as a rationality component using an input-output growth model. We basically employed an approach that sought to define and aggregate cultural values under rationality indices: instrumental, affective, value and traditional rationality from 29 countries with data from world value survey (1981-2009). We systematically had them tested in an endogenous growth model alongside traditional economic variables. We conclude that when these cultural variables are combined with the so-called economic variables, there is an improvement in the model explanation than before. In addition, two of these cultural indices indicated a statistically positive effect on economic growth (instrumental and affective rationality). However, traditional rationality index was also robust but with a negative coefficient. Value rationality showed a somewhat weaker link to economic growth and was statistically insignificant. The policy implications of these findings are also discussed.

Keywords: Economic growth; Rationality; Cultural traits (search for similar items in EconPapers)
JEL-codes: O1 O11 O5 (search for similar items in EconPapers)
Date: 2013-07-06
New Economics Papers: this item is included in nep-cul, nep-fdg and nep-gro
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published in Asian Social Science 9.9(2013): pp. 287-300

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https://mpra.ub.uni-muenchen.de/57591/1/MPRA_paper_57591.pdf revised version (application/pdf)

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