Geographical Personality Differences and Economic Success

Research question/goal: 

The spatial concentration of economic activity and success is a defining element of modern societies. Despite considerable research efforts, classic economic models often cannot fully explain the emergence and persistence of such spatial disparities. A possible reason could be that those models often focus on so-called hard input factors (such as natural resources or capital endowment). More specifically, these models neglect that economic behaviour is always embedded in a cultural context. While several regional-economic models indeed consider cultural differences as an important economic driver, they mostly were not able to reliably measure such cultural differences. Recently, however, new research has emerged that allows us to reliably measure cultural differences between places. This novel research is settled at the intersection of economic geography and psychology and has shown that not only individuals, but also geographic spaces have a “personality”.

This research project comprehensively examined the relationship between geographical personality differences and economic success. Specifically, we investigated this relationship across (a) several levels of analysis (i.e., countries, regions, companies) and (b) several dimensions of economic success (i.e., economic growth, innovation, and vitality) while (c) accounting for classic non-psychological predictors.

Our analysis revealed that the personality dimensions of openness, extraversion and neuroticism had the greatest economic relevance overall, with openness and extraversion being beneficial for economic success. For example, on the regional level, openness positively predicted the emergence of start-ups. Furthermore, companies in open regions produced innovations faster than companies in less open regions. A similar picture emerged with regard to extraversion, with extraverted regions being wealthier and fostering the emergence of innovations in companies. As for neuroticism, a reversed picture emerged. Neurotic regions were less wealthy, and companies in neurotic regions were slower in producing innovations. Taken together, our findings underline the economic relevance of geographical personality differences. However, diverging across spatial levels and economic indicators, our results also show that the relationship between geographical personality differences and economic success is more complex than initially thought.

Fact sheet

Vestische Forschungsstiftung
2019 to 2020
Data Sources: 
Secondary data
Geographic Space: