How do cultural values affect economic growth? An empirical evidence from world values survey (1994–2021)

Abstract

PurposeThis study utilizes cultural values from the World Values Survey (WVS) to investigate the cultural hypothesis regarding economic growth. Following Granato et al.'s (1996) theory, this paper describes a systematic method for developing analytical models that clarify the effect of cultural values on economic growth by using seemingly unrelated regression (SUR).Design/methodology/approachThe results are sustained through regression analysis using ordinary least squares (OLS) and SUR. The sample size covers all WVS countries from the third wave in 1994 to the seventh wave in 2021, due to the limited sample size in the first and second surveys, which is insufficient for estimation.FindingsResults highlight culture as a crucial factor for economic growth. Although the study found a positive effect of autonomy, life satisfaction, and post-materialism on economic growth, trust has been found to have a negative impact.Originality/valueAlthough the literature has theoretically proven the impact of cultural values on economic growth, there is a significant disparity in the empirical studies, owing to a lack of applied studies. This study deepens the cultural analysis compared to earlier empirical investigations. To the best of the authors' knowledge, this is the first attempt to assess the combined effect of the selected four cultural values on economic growth during 1994 and 2021. Furthermore, SUR analysis allows for the estimation of the variables' effects throughout the five waves.