National culture and central bank transparency: Cross-country evidence

Makrychoriti, Panagiota; Pasiouras, Fotios

doi:10.1016/j.intfin.2021.101318

Cited by 19 publications

(6 citation statements)

References 84 publications

(86 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Because the cultural dimensions are time-invariant, the key explanatory variable culture i will be omitted if we estimate a fixed effects model. We estimate a random effects model following Makrychoriti and Pasiouras (2021)…”

Section: Model Specificationsmentioning

confidence: 99%

“…Because the cultural dimensions are time‐invariant, the key explanatory variable

{italicculture}_{i}

will be omitted if we estimate a fixed effects model. We estimate a random effects model following Makrychoriti and Pasiouras (2021), and standard errors are clustered at the country level. To obtain sizable

β

estimates, we multiply the central bank independence index by 100.…”

Section: Data Descriptions and Model Specificationsmentioning

confidence: 99%

“…Recent empirical studies provide evidence on the vital role of national culture in the choice of regimes. Makrychoriti and Pasiouras (2021) reveal that secrecy is significantly related to central bank transparency. Cao et al (2020) argue that individualistic societies are more likely to choose floating regimes.…”

Section: Introductionmentioning

confidence: 99%

“…We can answer this question using the framework of Williamson (2000) and related theoretical analyses. First, central bank independence does not develop in a vacuum, and it is driven by pressures that can take the form of social and cultural rules (Lawrence & Shadnam, 2008; Makrychoriti & Pasiouras, 2021). Central banks choose to fit cultural rules to build and maintain their reputation with the public, and thus, the independence of central banks is determined by cultural and social norms (Johnson et al, 2019; McPhilemy & Moschella, 2019; Moschella & Pinto, 2019).…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Which dimensions of culture matter for central bank independence? International evidence

Fang

2024

Int Rev Finance

View full text Add to dashboard Cite

In this paper, we examine the relationship between Hofstede national cultures and de jure central bank independence. We propose theoretical hypotheses to explain how cultural dimensions determine central bank independence and test these hypotheses using an international dataset. We find that two cultural dimensions, namely, individualism and uncertainty avoidance, are significantly related to central bank independence. Central bank independence is higher in collectivistic and uncertainty avoidance countries. We further reveal that these cultural dimensions affect central bank independence in different ways. Individualism and uncertainty avoidance are related to independence in policy formulation and limitations on lending to governments. Although power distance and masculinity are insignificantly related to total central bank independence, they affect independence in objectives, policy formulation and limitation on lending to governments. Our results are robust through a series of checks.

show abstract

Section: Model Specificationsmentioning

confidence: 99%

“…Because the cultural dimensions are time‐invariant, the key explanatory variable

{italicculture}_{i}

β

estimates, we multiply the central bank independence index by 100.…”

Section: Data Descriptions and Model Specificationsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Which dimensions of culture matter for central bank independence? International evidence

Fang

2024

Int Rev Finance

View full text Add to dashboard Cite

show abstract

“…Several studies have shown links between cultures and formal institutions such as written laws, government quality, the rule of law, contract enforcement and governance ( Cline and Williamson, 2017 , Griffin et al, 2017 , La Porta et al, 1999 , Licht et al, 2005 , Licht et al, 2007 , Makrychoriti and Pasiouras, 2021 , Stulz and Williamson, 2003 ). However, these studies have not clarified whether findings about the influence of national culture on institutions may be confounded by the historical evolution of institutions that themselves have shaped national cultures.…”

Section: Introductionmentioning

confidence: 99%