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Effects of Culture on Firm Risk-Taking A Cross-Country and Cross-Industry Analysis

This paper investigates the effects of national culture on firm risk-taking, using a comprehensive dataset covering 50,000 firms in 400 industries in 51 countries. Risk-taking is found to be higher for domestic firms in countries with low uncertainty aversion, low tolerance for hierarchical relation...

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Bibliographic Details
Main Author: Mihet, Roxana
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2012
Series:IMF Working Papers
Subjects:
Multinationals
Interest Rates
Firm Objectives, Organization, And Behavior: General
Finance
Social Responsibility
Financial Services
Deflation
Competition
Multinational Firms
Asset Prices
Financial Markets
Foreign Corporations
Capital And Ownership Structure
Goodwill
Macroeconomics
Banking
Financial Sector Development
Financial Risk And Risk Management
Financing Policy
Inflation
Diversity
Corporate Culture
Value Of Firms
General Financial Markets: General (includes Measurement And Data)
Economic Sectors
Corporate Finance
Price Level
Economic History: Financial Markets And Institutions: General, International, Or Comparative
Banks And Banking
International Business
Financial Markets And The Macroeconomy
Prices
Financial Services Industry
Interest Rates: Determination, Term Structure, And Effects
Finance: General
Central Bank Policy Rate
United States
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper investigates the effects of national culture on firm risk-taking, using a comprehensive dataset covering 50,000 firms in 400 industries in 51 countries. Risk-taking is found to be higher for domestic firms in countries with low uncertainty aversion, low tolerance for hierarchical relationships, and high individualism. Domestic firms in such countries tend to take substantially more risk in industries which are more informationally opaque (e.g. finance, mining, IT). Risk-taking by foreign firms is best explained by the cultural norms of their country of origin. These cultural norms do not proxy for legal constraints, insurance safety nets, or economic development
Physical Description:50 pages
ISBN:9781475505603

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