Employing sub‐national panel data for 1,204 regions from 1980 to 2010, we show that regional appreciation of the cultural value Independence has a positive and statistically significant association with regional per capita income, whereas the value Obedience exerts a negative effect. Our data allow us to exploit within country‐year variation by including country‐time fixed effects to mitigate issues of omitted variable bias which are usually present when analysing cross‐national data. A large array of robustness tests supports an effect of cultural values on regional per capita income. Interacting regional culture with national institutions reveals that stronger national institutions moderate the impact of the regional cultural values.

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We study the link between temperature and economic development at the sub-national level, employing cross-sectional data from two distinct sources. In contrast to much of the existing cross-country literature on the temperature-income relationship, our setting allows for the inclusion of country fixed effects. Once we account for country fixed effects, we do not find a statistically robust relationship between regional temperature and three different measures of regional economic development (per capita GDP, nightlights and gross cell production). We also test whether temperature is non-linearly related to regional income (with hotter regions being potentially particularly prone to adverse effects of temperature on income) but find no systematic evidence in favor of such a relationship. Finally, we examine whether the effect of temperature on economic development is especially pronounced in poorer regions (e.g., due to weaker adaptation). Again, we find no statistically robust link.

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