Culture and entrepreneurial activity in the United States: a quantitative analysis
Karl Marx and Max Weber were the first to write about the link between culture and the economy. Although both hypothesized different directions of causality - Weber believed that culture influenced the economy, whilst Marx believed the opposite - they were in agreement that the topics were closely related. Economists have been slow to study the hypothesized linkages between culture and economic performance, especially using scientifically falsifiable methods. Some of this apprehension is due to the fact that economic studies largely rely upon mathematical modeling and statistical testing to investigate potential relationships. However, culture is difficult or, as some would argue, impossible to measure. Applying Hofstede's cultural dimensions to a state-level panel dataset spanning from 1998 to 2003, this project attempts empirically to measure the impact of these dimensions on entrepreneurial activity in the United States. The results are mixed - with two dimensions displaying coefficients with the opposite signs to those expected - thereby generating some interesting questions for future study. This is the first known paper to measure the impact of culture on regional entrepreneurial activity across the United States.
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Document Type: Research Article
Affiliations: Department of Economics, Central Connecticut State University, New Britain, CT, United States
Publication date: 2009-09-01