The purpose of this paper is to provide a comprehensive concept for the role of culture in economic growth.
The paper overviews the culture based development (CBD) concept and its precise definition of culture as an encompassing socio‐economic factor. The outlined CBD mechanism of impact is expressed in a testable empirical model. Alternative approaches for operationalizing the CBD definition of cultural capital are suggested and a real data application on intra‐regional level (for German Kreise) is presented.
The findings illustrate the ability of the CBD model to capture the statistical significance of culture.
The paper demonstrates the two innovative elements of the CBD approach to culture: first, measuring culture with a factor variable as a better alternative to the mono‐dimensional variables inferred by the state of the art; and second, thus capturing the overall economic meaning of the cultural factor (not just one aspect of it) for local socio‐economic development.
