The Korea Local Administration Review

Many Korean local governments have attempted to stimulate local economicgrowth by making cultural investments. Given this situation, the main objectiveof this study is to evaluate the implications expanding cultural expenditureshave for local economies. The unit of analysis in the study is 230 localities inKorea. This paper aims to estimate the causal effect of cultural investmentmeasured by the percentage of cultural budget and the level of culturalinfrastructure on local economy, which is represented by the gross regionaldomestic product (GRDP) and local tax. Findings reveal that financialinvestment on culture does not positively affect development of local economywhereas expanding cultural infrastructure appears to improve local economy interms of income. The result of these findings also suggests that it is necessaryto reexamine urban renewal strategies focusing on cultural investment; suchpolicies have been frequently implemented by a number of localities. Therefore,it is assumed that culture might be a consequence rather than a factor thatdrives economic development. A final key implication stemming from thisresearch is that many local governments should carefully monitor and evaluatevarious strategies used for urban development, while taking into account highexpectations regarding the economic value of the culture.
□ Keywords: cultural investments, local economy, cultural budget