| Author(s) | Data source(s) | Country samples | Time period | Dependent variables | Main explanatory variables | Main findings |
|---|---|---|---|---|---|---|
| Tanja Steigner, Marian Riedy and Antonina Bauman | OECD database (stats.oecd.org) | OECD countries | 2003–2012 | FDI | Cultural dimension (Hofstede, 1980, 2010); Legal Index (LLSV, 1999) | FDI flows from civil to common law countries are greater than vice versa. Further, cultural distance impacts FDI flows depending on the legal origin of the source country. More FDI flows from civil and common law countries when the host country has a higher [lower] power distance [individualism] score. Civil law countries send more FDI into countries with higher masculinity, uncertainty avoidance and indulgence scores, and with lower- (long) term orientation scores |
| Ben Agyei-Mensah and Samuel Buertey | Annual report of 163 companies listed in Lagos and Johannesburg stock exchange | Nigeria and South Africa | 2013 | Corporate risk disclosure index: the disclosure index = total corporate risk information disclosed/maximum (32) items disclosed for each company | Cultural dimension (Hofstede, 1991, 2001); corporate governance (institutional ownership, ownership concentration, independent directors) | The results indicate that power distance is negatively associated with the corporate risk disclosure. This implies that organizations where power distance is high are characterized by lower corporate risk disclosure and vice versa. From the analysis, two factors, namely, institutional ownership and profitability, were found to explain sample firms’ risk disclosure practices as they are positively and statistically related to corporate risk disclosure |
| Indrit Hoxha and Edward Hoang | Compustat Global | 94 countries | 1990–2015 | Corporate payout | Legal Index (World Bank; LLSV, 1999) | Corporate payout policy is influenced by investment and debt policies, and cannot be determined independently. Furthermore, we find that geographic/cultural/institutional variation influence the response of payout policy to other corporate financing decisions |
| Markus Mättö and Merv Niskanen | Amadeus database | 35 European countries | 2007 to 2011 | Trade credits | Cultural dimension (Hofstede, 1991, 2001; Schwartz value survey, SVS 1998–2005); religion (World Fact book of CIA) | Religion and national culture are associated with trade credit. The paper finds that the levels of trade credit are higher in Catholic countries than in Protestant ones and that people’s religiousness has an impact on trade credit only in Catholic countries. It also finds that Hofstede’s cultural dimensions, such as power distance and uncertainty avoidance, are positively associated with trade credit. Overall, its findings indicate that religion and national culture are important determinants of trade credit management, and that the association between commonly used cultural values and trade credit depends on the religious, legal, and financial environment |
| Feng Zhan | Datastream | 47 countries | 2003–2012 | Stock market volatility and synchronized stock price movements | Cultural dimension (Hofstede, 2010); Legal Index (LLSV, 1999) | This paper finds that nations with lower values of individualistic culture are more likely to have a higher number of synchronized stock price movements. Further, the correlation between stock price movements apparently increases stock market volatility. Nations with high individualistic culture have a lower number of synchronized stock price movements and thus have lower levels of stock market volatility. The positive relationship between synchronized stock price movements and stock market volatility is stronger for emerging markets during the financial crisis from June 2007 to December 2008. Rather than due to the different levels of economic development, the empirical results here indicate that a portion of the difference in market level volatility is attributed to the investor bias of different cultures |
| Author(s) | Data source(s) | Country samples | Time period | Dependent variables | Main explanatory variables | Main findings |
|---|---|---|---|---|---|---|
| Tanja Steigner, Marian Riedy and Antonina Bauman | OECD database ( | OECD countries | 2003–2012 | FDI | Cultural dimension (Hofstede, 1980, 2010); Legal Index (LLSV, 1999) | FDI flows from civil to common law countries are greater than vice versa. Further, cultural distance impacts FDI flows depending on the legal origin of the source country. More FDI flows from civil and common law countries when the host country has a higher [lower] power distance [individualism] score. Civil law countries send more FDI into countries with higher masculinity, uncertainty avoidance and indulgence scores, and with lower- (long) term orientation scores |
| Ben Agyei-Mensah and Samuel Buertey | Annual report of 163 companies listed in Lagos and Johannesburg stock exchange | Nigeria and South Africa | 2013 | Corporate risk disclosure index: the disclosure index = total corporate risk information disclosed/maximum (32) items disclosed for each company | Cultural dimension (Hofstede, 1991, 2001); corporate governance (institutional ownership, ownership concentration, independent directors) | The results indicate that power distance is negatively associated with the corporate risk disclosure. This implies that organizations where power distance is high are characterized by lower corporate risk disclosure and vice versa. From the analysis, two factors, namely, institutional ownership and profitability, were found to explain sample firms’ risk disclosure practices as they are positively and statistically related to corporate risk disclosure |
| Indrit Hoxha and Edward Hoang | Compustat Global | 94 countries | 1990–2015 | Corporate payout | Legal Index (World Bank; LLSV, 1999) | Corporate payout policy is influenced by investment and debt policies, and cannot be determined independently. Furthermore, we find that geographic/cultural/institutional variation influence the response of payout policy to other corporate financing decisions |
| Markus Mättö and Merv Niskanen | Amadeus database | 35 European countries | 2007 to 2011 | Trade credits | Cultural dimension (Hofstede, 1991, 2001; Schwartz value survey, SVS 1998–2005); religion (World Fact book of CIA) | Religion and national culture are associated with trade credit. The paper finds that the levels of trade credit are higher in Catholic countries than in Protestant ones and that people’s religiousness has an impact on trade credit only in Catholic countries. It also finds that Hofstede’s cultural dimensions, such as power distance and uncertainty avoidance, are positively associated with trade credit. Overall, its findings indicate that religion and national culture are important determinants of trade credit management, and that the association between commonly used cultural values and trade credit depends on the religious, legal, and financial environment |
| Feng Zhan | Datastream | 47 countries | 2003–2012 | Stock market volatility and synchronized stock price movements | Cultural dimension ( | This paper finds that nations with lower values of individualistic culture are more likely to have a higher number of synchronized stock price movements. Further, the correlation between stock price movements apparently increases stock market volatility. Nations with high individualistic culture have a lower number of synchronized stock price movements and thus have lower levels of stock market volatility. The positive relationship between synchronized stock price movements and stock market volatility is stronger for emerging markets during the financial crisis from June 2007 to December 2008. Rather than due to the different levels of economic development, the empirical results here indicate that a portion of the difference in market level volatility is attributed to the investor bias of different cultures |
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