The impact of cultural trade on economic growth

ABSTRACT

The relationship between international trade and economic growth has been an area of interest to many researchers in recent years. Although the literature is broad with respect to this topic, few studies have focused on the particular effect of cultural exports and imports on economic growth. This study addresses the relationship between trade in cultural goods and economic growth for 31 countries in Europe for the period 2004–2017, through a vector error correction model (VECM). A panel Granger causality test and a system generalized method of moments (GMM) are also utilized in this study. Cultural trade is characterized by exports and imports of cultural goods. The results indicate there is a long-run equilibrium relationship between gross domestic product, total exports, capital formation and labour force. Cultural exports and imports have a positive effect on GDP in the long run. In the short run, there is Granger causality of cultural imports on economic growth, total exports, total imports and capital formation.

KEYWORDS:

• Cultural exchange
• economic growth
• exports
• imports
• cointegration

JEL CLASSIFICATION:

• O47
• F43
• C23

Acknowledgments

The authors are grateful for the financial support provided by the Dirección General de Investigación, Innovación y Postgrado (DGIIP), Universidad Técnica Federico Santa María, Valparaíso, Chile, through the research project number PIL1713.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ This is a narrower category than creative industries and includes arts organizations such as art museums, symphonies, performing arts centres, dance companies and arts advocacy organizations.

² More information can be found in https://ec.europa.eu/eurostat/web/culture/data/database. Unfortunately, data on trade in cultural services are only available beginning in 2010 and thus are not included in our study.

³ The DOLS method could not be applied because of the short time period of the panel.

Additional information

Funding

This work was supported by the Universidad Técnica Federico Santa María, Dirección General de Investigación, Innovación y Postgrado (DGIIP) [PIL1713].