Culture Based Development in the Regions of China

Abstract

Is culture a relevant factor for the development of the Chinese regions and is this culture different from the institutional settings of China? The Culture Based Development (CBD) paradigm has been collecting evidence from the Western world about the impact of local cultural capital (a quantitative expression of culture) on the productivity of places throughout the EU and United States. The current article aims to replicate the CBD approach for the first time for the institutional setting of China. It does so by using a unique panel dataset for Chinese provinces over a seven-year period (2013–2019), which contains over sixty cultural indicators and employing factor analysis, 3SLS, and k-mean clustering estimation techniques. The main contribution of the article is the distinction that it draws conceptually and empirically between culture as a proto institution and the rest of the institutional settings in a country. Revealing part of the differences and the interaction between culture and institutions, this study sheds light on many important, still-unanswered-in-the-economic-literature questions about culture and local development in China.

Keywords:

• culture
• cultural capital
• living culture
• cultural heritage
• social capital
• productivity
• China

JEL Classification Codes:

• R12
• R23
• Z12
• Z18

Notes

1 Some of the sixty-three indicators had missing values due to which observations with missing values were dropped to implement the factor analysis, as the power of factor analysis shows when there is a high number of observations. Thus, instead of 217 observations, there are 119 available to estimate the effects. If the cultural variables with missing values were not used, this would certainly have the benefit of more degrees of freedom but would have the downside of addressing less efficiently the power of complexity reduction that is demonstrated in this article. All presented estimations are replicated in the second manner and the results are consistent with the ones presented here. Tables with these additional results are available from the author upon request, for the sake of brevity.

2 Culture, as an idea and attitude, can also be thought of as a club good, that one is entitled to only by club membership. But again—this is not the natural characteristic of culture—it is one way to create this time social endogeneity of the access to culture and its diffusion. Yet, if I choose, I can embrace an idea even if the club that identifies with it rejects my access to it. Moreover, my self-selected affiliation to the idea may have the power to cause a cognitive dissonance in the club members and persuade them towards cooperation even if I am not from their club. That is the natural power of culture.

3 For an extensive discussion of the links between Veblen, Bourdieu, and the CBD paradigm, see Tubadji, Wee and Webber (Forthcoming).

4 In a sense, culture divides into attitudes to self and attitudes to relation with others, and social capital is the latter.

5 This is a standard classification of Eurostat for the administrative division of Europe into regions and subregions

6 Don Webber, Adrian Healy, and Gillian Bristow (2018) show that clusters of GDP per capita within a country are a sign of lack of cohesion and different developmental trajectories within a country. I will aim at identifying the presence or absence of economic growth clubs, which we then will conjecture based on the latter and related literature that this is potential evidence for developmental trajectories differences.

7 The redistribution of wages is clearly a direct product of the institutional arrangements in a locality (via taxes, etc.), thus finding an effect from culture on the Theil index will be a straightforward test of the effect of culture on the local institutions. The fact that the local institutions are also a product of people’s cooperation is a nowadays widely spread economic take, which can be fairly argued to originate with Veblen and Weber but has nowadays taken root in many sub-disciplines such as network analysis and complex systems. For a comprehensive literature review on culture, institutions, and cooperation, see David Rose (2019) Why Culture Matters Most.

8 Note that CBD alerts against the use of fixed effects without the use of cultural variables, as this hides the effect of the important cultural factor from the analytical view of the researcher (Tubadji 2021b). However, this does not mean that fixed effects are not to be used per se, especially when the cultural component is clearly quantified, fixed effects can, of course, have a positive effect.

9 The way cultural entropy can further sum up statistically the effect of the balance between CH and LC has been shown in Tubadji (2022).

10 ICH = Intangible Culture Heritage. Available at http://www.ihchina.cn/. (Chinese language only.)

11 NCHA = National Cultural Heritage Administration. Available at http://www.ncha.gov.cn/. (Chinese language only.)

Additional information

Notes on contributors

Annie Tubadji

Annie Tubadji is at Swansea University, UK. The author expresses deep gratitude to Yue Dai, Swansea University, UK, who collected and generously provided the unique dataset used in this analysis.