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Explaining economic growth : the role of cultural variables

Leiknes, Thorbjørn
Master thesis
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URI
http://hdl.handle.net/11250/168403
Date
2009
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  • Master Thesis [4207]
Abstract
Current economic growth theories have unexplained parts, and do not take into

account cultural variables at national levels. Since economic life happens in a

social context, this paper investigates further how the norms and goals of a

society affect economic development. The paper gives an overview of earlier

research on cultural variables and economic growth. Variables which are

identified as important are religion, social capital, political preferences, attitudes

towards institutions, and Hofstede’s cultural variables. The paper also tests

earlier findings empirically, and find that general trust in a society is significant

for economic growth, supporting findings from social capital theory. In addition,

increased religiosity and power distance is found to be negatively associated with

economic development, while individualism is positively associated. However,

these relationships are not strong.

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