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Does Culture Drive Innovation and Export Quality?

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  • Hasan A. Faruq
  • Michael A. Webb

Abstract

Quality upgrading is important for two reasons: it helps us understand the determinants of trade flows between countries and it promotes economic development. We study the cultural determinants of export quality using Hofstede's four original cultural dimensions to provide hypotheses on R&D spending, patents per capita and export quality. We then employ three-stage least squares analysis and confirm our hypotheses. For example, we find uncertainty avoidance encourages small-scale continuous improvement initiatives and substantially increases export quality. Power distance and individualism increase export quality, while masculinity has a small impact on quality. Finally, we provide implications for understanding the direction of trade and developing policy.

Suggested Citation

  • Hasan A. Faruq & Michael A. Webb, 2016. "Does Culture Drive Innovation and Export Quality?," International Economic Journal, Taylor & Francis Journals, vol. 30(1), pages 19-38, March.
    • Handle: RePEc:taf:intecj:v:30:y:2016:i:1:p:19-38
    DOI: 10.1080/10168737.2015.1136667
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    Cited by:

    1. Gideon Ndubuisi & Solomon Owusu, 2022. "Trust, Efficient Contracting and Export Upgrading," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(6), pages 2708-2729, December.

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