The cultural dividend: a hidden source of economic growth in emerging countries

Purpose The purpose of this paper is to develop the theoretical linkage between culture and economic growth and empirically test the relationship by measuring culture and how it affects labor productivity. Design/methodology/approach This study uses a cross-section study of developing countries and regresses economic productivity growth on a set of control variables and cultural factors. Findings It is found that three cultural factors, economic attitudes, political attitudes, and attitudes towards the family, affect economic productivity growth. Originality/value Many economists ignore culture as a factor in economic growth, either because they discount the value of culture or because they have no simple way to quantify culture, resulting in the role of culture being under-researched. The study is the first to extensively examine the role of culture in productivity growth using large-scale data sources. The authors show that culture plays an important role in productivity gains across countries, contributing to the study of the effects of culture on economic development, and that culture can be empirically measured and linked to an activity that directly affects the economic growth – labor productivity.