Growing social value polarisation harms economic development

Greater polarisation impedes collective action and is associated with lower levels of GDP per capita, write Sjoerd Beugelsdijk, Mariko J. Klasing and Petros Milioni

The role of regional social capital changes over the course of the entrepreneurial process

The entrepreneurial process does not take place in a vacuum but is deeply embedded in its context, such as where a would-be entrepreneur lives. Johannes Kleinhempel, Sjoerd Beugelsdijk, and Mariko J. Klasing analyse how socio-cultural conditions shape entrepreneurship, emphasising the critical importance of regional social capital and the changing role of contextual conditions over the course of the entrepreneurial process

Cultural Roots of Entrepreneurship:Evidence from Second-Generation Immigrants

Does national culture influence entrepreneurship? Given that entrepreneurship and the economic, formal institutional, and cultural characteristics of nations are deeply intertwined and co-vary, it is difficult to isolate the effect of culture on entrepreneurship. In this study, we examine the self-employment choices of second-generation immigrants who were born, educated, and currently live in one country, but were raised by parents stemming from another country. We argue that entrepreneurship is influenced by durable, portable, and intergenerationally transmitted cultural imprints such that second-generation immigrants are more likely to become entrepreneurs if their parents originate from countries characterized by a strong entrepreneurial culture. Our multilevel analysis of two independent samples—65,323 second-generation immigrants of 52 different ancestries who were born, were raised, and live in the United States and 4,165 second-generation immigrants of 31 ancestries in Europe—shows that entrepreneurial culture is positively associated with the likelihood that individuals are entrepreneurs. Our results are robust to alternative non-cultural explanations, such as differences in resource holdings, labor market discrimination, and direct parent-child linkages. Overall, our study highlights the durability, portability, and intergenerational transmission of entrepreneurial culture as well as the profound impact of national culture on entrepreneurship

Value Diversity and Regional Economic Development

We investigate the link between culture and regional economic development within European countries. Considering a variety of cultural values, we provide evidence that it is the degree of diversity in these values at the regional level that strongly correlates with economic performance, rather than the prevalence of specific values. In particular, we show that greater value diversity is negatively associated with regional economic performance within countries, which also relates to lower institutional quality and poorer public goods provision. These patterns are robust even when diversity is measured on the basis of values expressed by emigrants residing outside their region of origin

Cultural change, risk-taking behavior and implications for economic development

This research studies the dynamic interplay between the evolution of risk attitudes and the process of economic development. This is achieved by integrating an endogenous growth model with a cultural transmission mechanism that captures how parents shape the risk attitudes of their children in response to economic incentives. The model predicts that in an economy in which the material benefits associated with risky entrepreneurial activity are high, agents will over time develop more risk tolerant attitudes, which in turn will speed up the rate of economic growth. It is shown that policy interventions aiming at supporting entrepreneurial activity can play an important role for overcoming the forces of risk aversion and promoting long-run economic growth. Furthermore, the paper highlights how by inducing cultural change, such policy interventions may quantitatively have larger effects than what would be predicted by more standard models of endogenous growth