National Culture, Corporate Governance Practices, and Firm Performance (original) (raw)
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SUPPORTED BY UNIGESTION “ National Culture , Corporate Governance Practices , and Firm Performance
2015
We contrast the universalist and cultural perspectives on “good” corporate governance practices. Using a new database from Governance Metrics International featuring highly granular measures of corporate governance practices across a large number of countries for 2006-2011, we find that the national cultural dimension of individualism is positively associated with accountability and transparent disclosure, and with corporate behavior standards, and that uncertainty avoidance is negatively associated with accountability and transparent disclosure, and with minority shareholder protection. Within countries, there is a largely positive association between firm-level “good” corporate governance practices and firm performance; however, across countries, the association is largely negative. Monday, April 20, 2015, 10:30-12:00 Room 125, Extranef building at the University of Lausanne National Culture, Corporate Governance Practices, and Firm Performance* First version: January 2012 This ve...
Management International Review, 2011
We posit that national cultural practices influence the institutional environment, which in turn has an influence on corporate governance practices. We empirically evaluate these relationships using structural equation modeling. 0 We utilize measures of national culture from Culture, Leadership, and Organizations: The Globe study of 62 Societies. For the institutional environment, we employ the World Bank Worldwide Governance Indicators. Consistent with theory, we find a strong relationship between these constructs. We further find that the institutional environment mediates the relationship between national culture and corporate governance practices. Corporate governance practices include measures of board accountability, financial disclosure and internal controls, shareholder rights, executive compensation, takeover defenses and ownership base, and corporate accountability and are available from Governance Metrics International. 0 As both culture and institutions are linked to corporate governance practices, efforts to change corporate governance practices around the world are best informed by an appreciation of cultural as well as institutional factors.
National Culture and Corporate Governance
SSRN Electronic Journal, 2015
In a series of crosscountry comparisons, we show that national culture is statistically significant in differentiating countries with different corporate governance systems. Using the Schwartz cultural value model and data on corporate governance systems, we analyze the impact of national culture on six dimensions of corporate governance. Countries that have stronger emphasis on the dimensions of Embeddedness, Egalitarianism, and Harmony are more likely to have bank-based systems, while countries with a stronger emphasis on Autonomy, Hierarchy, and Mastery tend to have market-based systems. The findings suggest several implications for the ongoing debate on convergence and divergence of corporate governance systems and policy reforms regarding financial crises.
Cultural Determinants of Corporate Governance: A Multi-Country Study
Internext
The purpose of this study was to investigate if the culture of countries influences earnings management practices. Earnings management (EM) was chosen as a Corporate Governance mechanism. Methodology: We selected the Earnings Management proxies from Leuz et al. (2003). We adopted Hosftede´s cultural dimensions: power distance, individualism, uncertainty avoidance and long term orientation. The sample comprised companies listed in 2016 in the stock markets of Brazil,
How does national culture affect corporate risk-taking?
Eurasian Business Review, 2018
The aim of this paper is to analyse the effects of national culture and formal institutions on corporate risk-taking. By applying panel data techniques for a sample of large quoted firms from 35 countries over the period of 2007-2014, we document that national culture proxied by Hofstede's dimensions (power distance, masculinity, individualism, uncertainty avoidance and long-term orientation) influence corporate risk-taking. We also observe that the characteristics and quality of formal institutions in a country can create an environment that promotes risk-taking when corruption perception and financial freedom levels are high. Finally, cultural heterogeneity among shareholders matters for corporate risk-taking, what may help to implement better corporate governance practises. Our research contributes to the existing literature providing further evidence on the direct and indirect effects of national culture on corporate decision-making.
Measuring cultural dimensions for cross-cultural management: Corporate governance outlook
Corporate Ownership and Control
The unobservable nature of the national culture is one of the main limits of research studying the impact of values systems’ in management sciences. This is why we aim in this study to identify a measure to three cultural dimensions namely, individualism (IND), masculinity (MASC) and long-term orientation (LTO). Our methodology is based on structural equation modeling (SEM) under LISREL approach, where latent variables are economic and demographic characteristics. Findings for the cross-national study over a period of 7 years including Tunisia, France, and Canada show that ecological indicators are able to determine studied cultural dimensions. However, due to the dynamic character of culture, some studied indicators are no longer the same as identified in prior studies.
Corporate Governance: Implications From A Cultural Perspective
Analele Stiintifice Ale Universitatii Alexandru Ioan Cuza Din Iasi Stiinte Economice, 2010
This article aims to research the ample cultural implications behind the expansion and adoption of corporate governance principles and practices and on the cultural differences inherent in the process of translation /localisation of American, English or transnational practices towards continental Europe. More precisely, in the last part of this article, we shall compare the Olivencia rapport from Spain and the Code Corporate Governnace Code of the Bucharest Stock Exchange, with a view to analyzing how elements of national culture influence the transfer of corporate governance principles.
The Nexus between Corporate Governance and Corporate Culture of Firms
Kwara State University Malete Nigeria, 2019
The paper reviews some past and recent studies on corporate governance and corporate culture of firms we focus on developed countries, emergent economy, and developing countries; using conceptual analysis from various literatures and theories. It was concluded that across the
A survey on national culture and corporate financial decisions: current status and future research
International Journal of Emerging Markets , 2020
Purpose-The extant literature provides substantial evidence that various facets of national culture play a significant role in corporate financial decision making. We systematically review the role of national culture on the various thematic domains of corporate financial decision making to outline what have been studies thus far and what needs to be studied. Design/methodology/approach-Keywords such as national culture, organizational culture, power distance, uncertainty avoidance, masculinity, risk aversion and individualism for a search in the prominent academic literature databases are used. The studies related to the corporate financial decision making that is tied with these keywords are identified and selected for the systematic review. Findings-The review of extant literature suggests strong evidence that national culture has a significant role in influencing corporate cash holding, corporate risk-taking, individual behaviour of the financial managers and initial public offering by the corporations. The review also indicates, although extant studies have examined the role of national culture in the key corporate financial decisions, evidence on the role of national culture in the firm's investment efficiency aspects is rather scarce. Also, what explains the role of national culture in corporate financial decision making has not been empirically exploited through causal mechanisms. Practical implications-The findings of the studies help advance our understanding of the current research status concerning the role played by the national culture in shaping corporate financial decisions and raise important future calls. Originality/value-To best of our knowledge, no prior study has systematically reviewed the role of national culture in the thematic domains of corporate financial decision making.
2021
The aim of the study was to analyze the influence of the dimensions of national culture on the relationship between corporate governance (CG) and earnings management (EM). There is evidence that in certain cultural contexts CG mechanisms appear to be ineffective in minimizing EM. Studies on governance and its influence on accounting information quality can help market participants make better decisions. It is important to include the cultural context in this relationship as it sheds light on an aspect that has hardly been explored in the research, which can improve the informational environment of organizations. In practical terms, the results may contribute to organizations paying more attention to the cultural influence of countries when implementing or improving their governance mechanisms, with the aim of making them more effective in aligning interests and monitoring behaviors in organizations. Moreover, market participants may require alterations in these mechanisms in more in...