Analysis of the Impact of Fiscal Expenditure on Culture and Arts on the Local Economy

This study analyzes the impact of fiscal expenditure on the cultural and arts sector on the local economy. For this purpose, panel data from 16 metropolitan and provincial regions in South Korea covering the period from 2009 to 2020 were constructed, and a panel quantile regression analysis was conducted. The results indicate that per capita fiscal expenditure on the cultural and arts sector generally has a positive effect on per capita Gross Regional Domestic Product (GRDP), with a stronger effect observed in economically advanced regions. Furthermore, cultural infrastructure significantly contributes to economic growth across all quantiles, with its impact being particularly pronounced in the lower quantiles. Conversely, fiscal independence exhibits a significant positive effect only in the median quantile, while manufacturing-related variables have only a limited impact, being significant in certain quantiles. This study provides empirical evidence that the impact of fiscal expenditure on the cultural and arts sector varies according to the economic level of a region, underscoring the need for targeted policy approaches. Specifically, expanding cultural infrastructure could be more effective in economically less developed regions, whereas policies linking the cultural and arts industry with economic value creation could yield greater benefits in economically advanced regions.