National Culture and Bank Deposits

Abstract

This paper investigates the relation between national culture and bank deposits. Using annual data (1995Using annual data ( -2015 for 99 banks that participated in the 2014 stress tests of the European Banking Authority, we document relations between three national cultural traits and bank deposits. The effect of hierarchy and individualism on deposits is stronger (positive and negative, respectively) in domestic banks where culture is more homogeneous compared to global banks.On the other hand, the positive effect of trust on deposits is robust for both domestic and global banks, reinforcing the view that banking is largely based on trust. Results are robust to empirical specifications alleviating endogeneity concerns, thus suggesting a causal effect.Motivated by recent regulatory changes emphasizing the importance of liquidity (deposit) stability, we further analyse the impact of annual bank-level deposit stability on the trustdeposits relation. We show that high deposit volatility is associated with a decrease in the positive effect that trust has on deposit levels.

Corporate culture and IPOs

“…Future research could examine other IPO issues in relation to corporate culture, including but not limited to short‐run performance (Cumming et al, 2022), long‐run IPO performance in other countries (e.g., Thomadakis et al, 2012), how corporate culture affects IPOs differentially across countries (e.g., Bessler & Stanzel, 2009; Migliorati & Vismara, 2014; Ritter, 2003), how culture influences different types of investors (Colaco et al, 2009), and the intersecation between national culture (Mourouzidou‐Damtsa et al, 2021; Zhang, 2022) and corporate culture.…”

Is Social Trust a Governance Mechanism? Evidence From Dividend Payouts of Chinese Firms

“…Third, consistent with the argument of Aggarwal and Goodell (2014), this study has important implications not only for corporate managers and government officials, but also for policymakers, as results suggest that fostering trust is vital to optimizing institutional environments. A recent study by Damtsa, Milidonis and Stathopoulos (2021) shows that national culture affects bank deposits. Zhang (2022) also finds that cultural diversity affects capital structures of multinational firms.…”