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Cultural Impact on Economic Freedom in OECD Member Countries

Author

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  • Dušan Steinhauser

    (University of Economics in Bratislava, Faculty of Commerce, Department of International Trade)

Abstract

The new institutional economic theory working with the concept of transaction costs assumes a quality setting of formal and informal institutions for an effectively functioning economic system. In an economic freely environment, we can assume a lower level of transaction costs. The main aim of the presented article is to identify Hofstede’s cultural dimensions that have a combined impact with the Human Development Index on economic freedom measured by The Heritage Foundation Index of Economic Freedom in OECD member countries. We used instruments of quantitative analysis, namely correlation and multiple regression analysis. We confirmed a negative impact of power distance and uncertainty avoidance on The Heritage Foundation Index of Economic Freedom. Countries with higher values of the Human Development Index achieve better score in The Index of Economic Freedom. In literature review and discussion we open the question of cancel culture in context of economic freedom for further research and we recommend the application of the concept of economic freedom in accordance with the principle of subsidiarity. However, the importance of economic freedom appears differently for diverse groups of countries.

Suggested Citation

  • Dušan Steinhauser, 2022. "Cultural Impact on Economic Freedom in OECD Member Countries," Journal of Economics / Ekonomicky casopis, Institute of Economic Research, Slovak Academy of Sciences, vol. 70(1), pages 57-75, January.
    • Handle: RePEc:sav:journl:v:70:y:2022:i:1:p:57-75
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    References listed on IDEAS

    as
    1. Gehring, Kai, 2013. "Who Benefits from Economic Freedom? Unraveling the Effect of Economic Freedom on Subjective Well-Being," World Development, Elsevier, vol. 50(C), pages 74-90.
    2. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2006. "Does Culture Affect Economic Outcomes?," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 23-48, Spring.
    3. Chen, Chinchih & Frey, Carl Benedikt & Presidente, Giorgio, 2021. "Culture and contagion: Individualism and compliance with COVID-19 policy," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 191-200.
    4. Coduras , Alicia & Autio, Erkko, 2013. "Comparing subjective and objective indicators to describe the national entrepreneurial context: the Global Entrepreneurship Monitor and the Global Competitiveness Index contributions," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 26, pages 47-74.
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    More about this item

    Keywords

    The Heritage Foundation Index of Economic Freedom; culture; Hofstede; Human Development Index; cancel culture;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth

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