CULTURE AND GROWTH: SOME EMPIRICAL EVIDENCE

Using Hofstede's cultural data set, this paper examines the impact of cultural characteristics on a nation's economic performance. Using a two‐step estimation procedure, we first estimate a panel growth regression and obtain estimates of each nation's fixed effects, which reflect idiosyncratic differences in growth performance. In the second step, we regress the fixed effects on invariant cultural and institutional variables. Our estimation results suggest that individuality and tolerance for uncertainty are the most important cultural factors in explaining nation‐specific growth performance. Furthermore, our findings suggest that political and property rights play a major role in determining idiosyncratic growth.