The effects of genetic and cultural traits on economic prosperity

Three influences of human culture and genetics on economic prosperity are described. First, cultural diversity is examined in terms of contributions to innovation. Conceptually, some previous studies have attributed a positive effect on knowledge accumulation to the cultural diversity of people in a country. Positive effects have also been ascertained on economic metrics such as income per capita. Nevertheless, previous studies have not noted the economic significance of cultural diversity. In contrast, the present study makes use of the knowledge transfer from academic research to industrial innovation as a metric for determining the contribution of cultural diversity to innovation. The location of the study is the United States (US). A panel-data set including four research fields are developed for the 2003–2012 period. A new variable for cultural diversity featuring birthplace and cultural traits is obtained using state-level data. A knowledge-production model is introduced and estimated using a cluster-robust, two-step generalised method of moments with fixed effects. Empirically, the contribution of cultural diversity to innovation is determined to be as strong as the knowledge diffusion in some research fields. The US is referred to as a technology frontier by some authors. Genetic distances from the US were found to be a barrier to technology transfer to other countries. In contrast, the present study uses the Asian Five Dragons as the reference economies in order to study economic divergence in terms of income per capita and innovation. In particular, cultural distances based on individualism–collectivism, masculinity–femininity, and power distance are introduced in order to perform head-to-head comparisons with the effects of genetic distances. Ten samples are developed and tested in order to robustly find the empirical outcomes. The present study introduces two models of economic divergence. Using cluster-robust ordinary least squares method, the results indicate considerably higher impacts of cultural distances than genetic distances. In particular, the outcome implies that deviation from low individualism to high individualism could reduce economic divergence from the Five Asian Dragons. In some previous studies, genetic distances were asserted with the limitation of no genetic effects. Since genetic distances are also a significant determinant and instrumental variable in economics, the present study includes tests for some genetic effects on innovation. A previous study has pioneered an investigation of the effects of 5-HTTLPR polymorphisms on economic wellbeing. In contrast, the present study suggests the importance of polymorphisms belonging to type-1 CRH that is determined by genetic studies to have a significant relationship to emotional problems such as depression, psychosis, and other mental disorders. Two country-level samples with seven single-nucleotide polymorphisms are developed. The present study introduces and tests the ‘stress-based innovation hypothesis’ in one model with several variants. The regression results based on random-effect maximum likelihood show that the prospects of innovation across the world are adversely altered by emotional stress that is due to genetic diversity, while a potential remedy is also discussed