Agricultural Legacy, Individualistic Culture, and Techology Adoption

This paper presents evidence on the relationship between culture and technology adoption. It hy-pothesizes that societies with more individualistic cultures are more inclined to embrace new tech-nologies. Using data for 82 countries, the estimates show that the technology adoption index of Comin et al. (2010) strongly correlates with national scores on individualistic cultures. Consistent evidence of this is provided by analysis conducted at the individual level using data from the World Value Surveys. Based on the notion that farming rice makes the members of a society more interdependent, and hence less individualistic, historical information on the suitability of land for rice farming is used as an instrument to isolate the endogenous influence of culture. Under the identifying restriction assumption that such an agricultural legacy explains differences in technolog-ical development in the modern world through influencing the formation of individualistic cultures, the instrumental variables estimates consistently show that the variation in the exogenous component of individualistic cultures significantly explains differences in the levels of current technology adoption across the globe. Similar findings are obtained when the analysis is conducted using state-level data from the United States. On the whole, these results lend strong support to our hypothe-sis that countries with higher scores on individualism are more inclined to adopt new technologies, thereby providing a framework for understanding the underlying causes of the variation in the lev-els of technological development across countries.