The effects of national culture on financial sector development: Evidence from emerging and developing economies

Khan, Muhammad Atif; Gu, Lulu; Khan, Muhammad Asif; Meyer, Natanya

doi:10.1016/j.bir.2021.02.003

Cited by 18 publications

(20 citation statements)

References 48 publications

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“…According to the GMM-Differenced estimator, the AR (2) tests support the validity of the estimator, implying that the model does not suffer from over-identification [59,60]. Table 4 presents the results of the new model estimation with the inclusion of a two-year lag.…”

Section: Econometric Analysis and Resultsmentioning

confidence: 99%

Global Oil Price and Innovation for Sustainability: The Impact of R&D Spending, Oil Price and Oil Price Volatility on GHG Emissions

et al. 2021

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Recently, sustainable economic growth has taken the front line of the global development agenda. The common dependency on fossil fuel energy, greenhouse gas (GHG) emissions and the continuous rising demands for energy have posed challenges that put the world in a climate change trap. This work empirically analyzes the effect of innovation, oil price, oil price volatility and economic growth on GHG emissions over the period of 1991–2015. The study compares the emission level between European Union countries (EU) (26), oil-producing countries (22), China and the United States of America (USA) using the Driscoll–Kraay model. The main empirical finding points to a positive effect of innovation on GHG emission reduction initiatives in oil-importing economies. Particularly, EU countries significantly minimized emissions due to innovation, followed by China and the USA. Contrarily, the effect of innovation increases GHG emission in oil-exporting economies. The results also indicate broader significant effects of oil price and oil price volatility on GHG emission. Interestingly, the effect of oil price on GHG emission is asymmetrical between oil-exporting and -importing economies. Oil price increases in oil-importing countries decrease GHG emission; contrarily, its effect increases emissions in oil-exporting countries. Thus, oil-exporting countries lack motivation to decrease emission levels due to oil price escalation. Unlike the oil price, oil price volatility comparably decreases GHG emissions in oil-exporting and -importing economies. Thus, one might be tempted to take oil price volatility and the future uncertainty of oil price as a virtuous instance rather than oil price increment. Thus, policymakers need to pay attention to market forces and policy measures to monitor GHG emissions due to economic activities. The results are also robust under the alternative econometrics estimation model of generalized method of moments (GMM)-Differenced.

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Section: Econometric Analysis and Resultsmentioning

confidence: 99%

Global Oil Price and Innovation for Sustainability: The Impact of R&D Spending, Oil Price and Oil Price Volatility on GHG Emissions

et al. 2021

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“…Second, our article draws on the literature on the relationship between culture and finance. The literature on this subject examines the effect of culture on debt ratios [15], debt maturity [16], dividend policies [17], earnings management [18], mergers and acquisitions [19], investment [20], risk-taking [21], profit reinvestment [22] and financial development [23,24]. Our paper contributes to this literature by showing that national culture affects yet another aspect of finance, namely, financial inclusion.…”

Section: Introductionmentioning

confidence: 83%

“…Studies on the impact of culture on various business practices that have been performed so far include the study of managerial attitudes [36], business performance [37], cross-border acquisition performance [38], institutions [39] and corporate capital structures [15]. In recent decades, economic and financial development has emphasized the importance of cultural context [23,24,39]. In our study, we use the four dimensions of Hofstede [11] which are Individualism, Uncertainty Avoidance, Masculinity, and Power Distance to check the causal relationship between culture and FI.…”

Section: Empirical Literature Review About National Culture and Fimentioning

confidence: 99%

“…Previous research has looked at how individualistic culture influences capital markets outcomes, such as momentum strategy returns, stock price synchronization, stock price crash risk, the pricing of extreme returns [42], corporate decision-making like investment strategies, debt maturity choice, cash holdings, and executive cohesion [43,44]. Moreover, few studies also explored individualism's effect on overall economic and financial development [23,24,33,45]. Individualism fosters FI through a variety of channels, according to published research.…”

Section: Empirical Literature Review About National Culture and Fimentioning

confidence: 99%

“…Masculinity refers to the degree to which male characteristics, such as competitiveness, assertiveness, and success, are rewarded in a given society. However, masculinity is also an important part of national culture, the literature on culture and finance pays little attention to this aspect of culture [24]. In the literature, there is evidence of a link between a high masculine score/index and increased risk-taking [52].…”

Section: Hypothesis 2 Uncertainty Avoidance Has a Negative Effect On ...mentioning

confidence: 99%

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National Culture and Financial Inclusion: Evidence from Belt and Road Economies

et al. 2022

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Financial Inclusion is a key factor in achieving the sustainable development goals of the United Nations. The research in the area of financial inclusion is becoming more critical for scholars and policymakers. In previous studies, effects of formal institutions on financial inclusion have been explored. However, influence of informal institutions (culture) on financial inclusion remained untapped. To fill this gap, we investigate how national culture affects the financial inclusion of 81 Belt and Road economies using 17 years of data from 2004 to 2020. The empirical findings of the two-stage least square (2SLS) show that Hofstede’s cultural dimensions are significantly associated with financial inclusion with different signs and levels of magnitude. We find that financial inclusion is lower in countries where uncertainty avoidance and power distance is high and that the opposite is true for individualism and masculinity. The overall results are reliable to a series of robustness checks and provide a useful basis for policymakers, regulatory agencies, and other stakeholders in achieving the sustainable development goal of financial inclusion in Belt and Road countries.

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National culture and the demand for physical money during the first year of the COVID-19 pandemic

Kotkowski

2023

Finance Research Letters

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The effects of national culture on financial sector development: Evidence from emerging and developing economies

Cited by 18 publications

References 48 publications

Global Oil Price and Innovation for Sustainability: The Impact of R&D Spending, Oil Price and Oil Price Volatility on GHG Emissions

Global Oil Price and Innovation for Sustainability: The Impact of R&D Spending, Oil Price and Oil Price Volatility on GHG Emissions

National Culture and Financial Inclusion: Evidence from Belt and Road Economies

National culture and the demand for physical money during the first year of the COVID-19 pandemic

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