Are religion and culture relevant for corporate risk-taking?international evidence

  1. José María Díez-Esteban 1
  2. Jorge Bento Farinha 2
  3. Conrado Diego García Gómez 3
  1. 1 Universidad de Burgos
    info

    Universidad de Burgos

    Burgos, España

    ROR https://ror.org/049da5t36

  2. 2 Universidade Do Porto
    info

    Universidade Do Porto

    Oporto, Portugal

    ROR https://ror.org/043pwc612

  3. 3 Universidad de Valladolid
    info

    Universidad de Valladolid

    Valladolid, España

    ROR https://ror.org/01fvbaw18

Revista:
Business Research Quarterly

ISSN: 2340-9444 2340-9436

Año de publicación: 2019

Volumen: 22

Número: 1

Páginas: 36-55

Tipo: Artículo

DOI: 10.1016/J.BRQ.2018.06.003 DIALNET GOOGLE SCHOLAR lock_openAcceso abierto editor

Otras publicaciones en: Business Research Quarterly

Resumen

Utilizando una muestra grande de empresas de 37 países durante el período 2007-2015, analizamos empíricamente el impacto de las características de la religión y la cultura nacional en el nivel de toma de riesgos corporativos en todo el mundo y los canales a través de los cuales esto puede ocurrir. En primer lugar, observamos inicialmente que los diferentes orígenes religiosos tienen diferentes impactos en la toma de riesgos corporativos, que son negativos para los países católicos y de base islámica y positivos para las empresas en las naciones protestantes. En segundo lugar, observamos que las empresas en países con altos puntajes de distancia de poder, masculinidad, individualismo y orientación a largo plazo tienden a aumentar la toma de riesgos, mientras que los altos niveles de evitación de la incertidumbre moderan el comportamiento corporativo de toma de riesgos.

Información de financiación

This research has been financed by Portuguese Public Funds through FCT (Fundação para a Ciência e aTecnologia) in the framework of the project UID/ECO/04105/2013.

Financiadores

Referencias bibliográficas

  • Adhikari, B.K., Agrawal, A., Does local religiosity matter for bank risk-taking?. J. Corp. Finance 38 (2016), 272–293.
  • Aggarwal, R., Faccio, M., Guedhami, O., Kwok, C.C., Culture and finance: an introduction. J. Corp. Finance(41), 2016, 466–474.
  • Alnahas, A.M., Kabir Hassan, M., Ismail, G.M., Religion and mergers and acquisitions contracting: the case of earnout agreements. J. Corp. Finance 42 (2017), 221–246.
  • Anderson, C., Galinsky, A.D., Power, optimism, and risk-taking. Eur. J. Soc. Psychol. 36:4 (2006), 511–536.
  • Anderson, C.W., Fedenia, M., Hirschey, M., Skiba, H., Cultural influences on home bias and international diversification by institutional investors. J. Bank. Finance 35:4 (2011), 916–934.
  • Anselmi, D.L., Law, A.L., Questions of Gender. 1998, McGraw-Hill, Boston, United States.
  • Antonczyk, R.C., Salzmann, A.J., Overconfidence and optimism: the effect of national culture on capital structure. Res. Int. Bus. Finance 31 (2014), 132–151.
  • Arellano, M., Bond, S., Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Rev. Econ. Stud. 58:194 (1991), 277–297.
  • Arellano, M., Bover, O., La econometría de datos de panel. Investig. Econ. 14:1 (1990), 3–45.
  • Arosa, C.M., Richie, N., Schuhmann, P.W., The impact of culture on market timing in capital structure choices. Res. Int. Bus. Finance 31 (2014), 178–192.
  • Ashraf, B.N., Zheng, G., Arshad, S., Effects of national culture on bank risk-taking behavior. Res. Int. Bus. Finance 37 (2016), 309–326.
  • Attig, N., El Ghoul, S., Guedhami, O., Do multiple large shareholders play a corporate governance role? Evidence from East Asia. J. Financ. Res. 32:4 (2009), 395–442.
  • Attig, N., Guedhami, O., Mishra, D., Multiple large shareholders, control contests, and implied cost of equity. J. Corp. Finance 14 (2008), 721–737.
  • Bainbridge, S.M., The bishops and the corporate stakeholder debate. Villanova J. Law Invest. Finance, 2002, 3–37.
  • Barber, B.M., Odean, T., Boys will be boys: gender, overconfidence, and common stock investment. Q. J. Econ. 1616:1 (2001), 261–292.
  • Baxamusa, M., Jalal, A., Does religion affect capital structure?. Res. Int. Bus. Finance 31 (2014), 112–131.
  • Becker, G., Preferences and values. Becker, G., (eds.) Accounting for Taste., 1996, Harvard University Press, Cambridge.
  • Bennedsen, M., Nielsen, K.M., Incentive and entrenchment effects in European ownership. J. Bank. Finance, 34, 2010 2.212–2.229.
  • Berger, A.N., Imbierowicz, B., Rauch, C., The roles of corporate governance in bank failures during the recent financial crisis. J. Money Credit Bank. 48:4 (2016), 729–770.
  • Beugelsdijk, S., Maseland, R., Culture in Economics. 2011, Cambridge University Press, Cambridge, United Kingdom.
  • Blundell, R., Bond, S., GMM estimation with persistent panel data: an application to production functions. Econom. Rev. 19:3 (2000), 321–340.
  • Blundell, R., Bond, S., Windmeijer, F., Estimation in dynamic panel data models: improving on the performance of the standard GMM estimator. Baltagi, T, Fomby, B, Carter Hill, B, (eds.) Nonstationary Panels, Panel Cointegration, and Dynamic Panels, 2000, Emerald, Bingley, 53–92.
  • Bond, S., Dynamic Panel Data Models: A Guide to Micro Data Methods and Practice. Working Paper 9/02, The Institute for Fiscal Studies, 2002.
  • Botticini, M., Eckstein, A., Jewish occupational selection: education, restrictions, or minorities?. J. Econ. Hist. 65:4 (2005), 922–948.
  • Breton-Miller, L., Miller, D., Why do some family businesses out-compete? Governance, long-term orientations, and sustainable capability. Entrep. Theory Pract. 30:6 (2006), 731–746.
  • Breuer, W., Riesener, M., Salzmann, A.J., Risk aversion vs. individualism: what drives risk taking in household finance?. Eur. J. Finance 20:5 (2014), 446–462.
  • Bruno, V., Shong Shing, H., Globalization of corporate risk-taking. J. Int. Bus. Stud.(45), 2014, 800–820.
  • Buss, D., Sex differences in human mate preferences: evolutionary hypotheses tested in 37 cultures. Behav. Brain Sci. 12 (1989), 1–49.
  • Campbell, J., Lettau, M., Malkiel, B., Xu, Y., Have individual stocks become more volatile? An empirical exploration of idiosyncratic risk. J. Finance 56:1 (2001), 1–43.
  • Chang, K., Noorbakhsh, A., Does national culture affect international corporate cash holdings?. J. Multinatl. Financ. Manage. 19:5 (2009), 323–342.
  • Chee-Wooi, H., Ali, R., Does a Muslim CEO matter in Shariah-compliant companies? Evidence from Malaysia. Pac. Basin Financ. J. 42 (2017), 126–141.
  • Chen, Y., Dou, P.Y., Rhee, S.G., Truong, C., Veeraraghavan, M., National culture and corporate cash holdings around the world. J. Bank. Finance 50 (2015), 1–18.
  • Claessens, S., Djankov, S., Ownership concentration and corporate performance in the Czech Republic. J. Comp. Econ. 27 (1999), 498–513.
  • Cohn, T.H., Global Political Economy: Theory and Practice. Routledge., 2016.
  • Coles, J.L., Daniel, N.D., Naveen, L., Managerial incentives and risk taking. J. Financ. Econ. 79:2 (2006), 431–468.
  • Conyon, M., Judge, W.Q., Useem, M., Corporate governance and the 2008–09 financial crisis. Corp. Govern.: Int. Rev. 19:5 (2011), 399–404.
  • Davidson, P., Culture, structure and regional levels of entrepreneurship. Entrep. Reg. Dev. 7 (1995), 41–62.
  • De Nicolò, G., Size, Charter Value and Risk in Banking: An International Perspective. IFC Discussion Paper No. 689. 2000, Board of Governors of the Federal Reserve, Washington, DC.
  • Díez-Esteban, J.M., Farinha, J.B., García-Gómez, C.D., The role of institutional investors in propagating the 2007 financial crisis in Southern Europe. Res. Int. Bus. Finance 38 (2016), 439–454.
  • Díez-Esteban, J.M., García-Gómez, C.D., López-Iturriaga, F.J., International evidence about the influence of large shareholders on corporate risk taking. Span. J. Finance Account. 13:31 (2013), 126–144.
  • Ekelund, R.B., Hebert, R.F., Tollison, R.D., An economic analysis of the Protestant Reformation. J. Polit. Econ. 110:3 (2002), 646–671.
  • Erkens, D.H., Hung, M., Matos, P., Corporate governance in the 2007–2008 financial crisis: Evidence from financial institutions worldwide. J. Corp. Finance 18:2 (2012), 389–411.
  • Fidrmuc, J.P., Jacob, M., Culture, agency costs, and dividends. J. Comp. Econ. 38:3 (2010), 321–339.
  • Giavazzi, F., Petkov, I., Schiantarelli, F., Culture: Persistence and evolution (No. w20174). 2014, National Bureau of Economic Research.
  • Gonzalez, A., André, P., Board effectiveness and short termism. J. Bus. Finance Account. 41:1–2 (2014), 185–209.
  • Graham, J.R., Harvey, C.R., Puri, M., Managerial attitudes and corporate actions. J. Financ. Econ. 109:1 (2013), 103–121.
  • Gray, J.A., Neural systems, emotion, and personality. Madden, J. IV, (eds.) Neurobiology of Learning, Emotion, and Affect, 1991, Raven Press, New York, 273–396.
  • Griffin, D.W., Guedhami, O., Kwok, C.C.Y., Li, K., Shao, L., National culture: the missing country-level determinant of corporate governance. J. Int. Bus. Stud. 48:6 (2017), 740–762.
  • Guiso, L., Sapienza, P., Zingales, L., Does culture affect economic outcomes?. J. Econ. Perspect. 20:2 (2006), 23–48.
  • Guiso, L., Sapienza, P., Zingales, L., Cultural Biases in Economic Exchange. 2004, National Bureau of Economic Research.
  • Guiso, L., Sapienza, P., Zingales, L., Trusting the stock market. J. Finance 63 (2008), 2557–2600.
  • Hilary, G., Hui, J.K., Does religion matter in corporate decision making in America?. J. Financ. Econ. 93 (2009), 455–473.
  • Hill, C., Snell, S., Effects of ownership structure and control on corporate productivity. Acad. Manage. J.(32), 1988, 25–46.
  • Hofstede, G., Hofstede, G.J., Minkov, M., Cultures and Organizations: Software of the Mind. Rev. 3rd ed., 2010, McGraw-Hill, New York, United States.
  • Hofstede, G.H., Cultures and Organizations: Software of the Mind. 1991, McGraw-Hill, Berkshire, England.
  • Hofstede, G.H., Culture's Consequences: International Differences in Work-Related Values. 1980, SAGE Publications, Thousand Oaks, United States.
  • Hofstede, G.H., Culture's Consequences: Comparing Values, Behaviors, Institutions, and Organizations across Nations. second edition, 2001, SAGE Publications, Thousand Oaks, United States.
  • Hogg, M.A., Abrams, D., Social Identifications: A Social Psychology of Intergroup Relations and Group Processes. 1988, Psychology Press, London.
  • Hu, Y., Izumida, S., Ownership concentration and corporate performance: a causal analysis with Japanese panel data. Corp. Gov.: Int. Rev. 16:4 (2008), 342–358.
  • Huang, B., Wald, J., Martell, R., Financial market liberalization and the pricing of idiosyncratic risk. Emerg. Mark. Rev. 17 (2013), 44–59.
  • Hutchinson, M., Seamer, M., Chapple, L.E., Institutional investors, risk/performance and corporate governance. Int. J. Account. 50:1 (2015), 31–52.
  • Iannaccone, L.R., Introduction to the economics of religion. J. Econ. Lit. 36:3 (1998), 1465–1495.
  • Ignatowski, M., Korte, J., Wishful thinking or effective threat? Tightening bank resolution regimes and bank risk-taking. J. Financ. Stab. 15 (2014), 264–281.
  • Inkeles, A., Levinson, D.J., National character: the study of modal personality and sociocultural systems. Lindzey, G., Aronson, E., (eds.) The Handbook of Social Psychology IV, 1969, McGraw-Hill, New York, United States, 418–506 (first published 1954).
  • Iqbal, M., Molyneus, P., Thirty Years of Islamic Banking. 2005, Palgrave MacMillan, London, United Kingdom.
  • Iyer, S., The new economics of religion. J. Econ. Lit. 54:2 (2016), 395–441.
  • Jensen, M., Meckling, W., Theory of the firm: managerial behaviour, agency costs and ownership structure. J. Financ. Econ. 3:4 (1976), 305–360.
  • John, K., Litov, L., Yeung, B., Corporate governance and risk-taking. J. Finance, 63(4), 2008 1.679–1.728.
  • Kanagaretnam, K., Lobo, G.J., Wang, C., Whalen, D.J., Religiosity and risk-taking in international banking. J. Behav. Exp. Finance 7 (2015), 42–59.
  • Karolyi, G.A., The gravity of culture for finance. J. Corp. Finance 41 (2016), 610–625.
  • Kempf, A., Ruenzi, S., Thiele, T., Employment risk, compensation incentives, and managerial risk taking: evidence from the mutual fund industry. J. Financ. Econ. 92:1 (2009), 92–108.
  • Kluckhohn, F.R., Strodtbeck, F.L., Variations in Value Orientations. 1961, Greenwood Press, Westport (CT), United States.
  • Konishi, M., Yasuda, Y., Factors affecting bank risk-taking: evidence from Japan. Journal of Banking and Finance 28:1 (2004), 215–232.
  • Konjin, S.J.J., Kräussl, R., Lucas, A., Blockholder dispersion and firm value. J. Corp. Finance, 17, 2011 1.330–1.339.
  • KPMG, Never Again? Risk Management in Banking beyond the Credit Crisis. 2009.
  • Kreiser, P.M., Marino, L.D., Dickson, P., Weaver, K.M., Cultural influences on entrepreneurial orientation: the impact of national culture on risk taking and proactiveness in SMEs. Entrep. Theory Pract. 34:5 (2010), 959–983.
  • Kubicek, A., Bhanugopan, R., Fish, A., Perceiving safety and risk in culturally diverse organizations: toward a conceptual model. Risk Manage. 15:3 (2013), 199–223.
  • Kumar, A., Page, J.K., Spalt, O.G., Religious beliefs, gambling attitudes, and financial market outcomes. J. Financ. Econ. 102 (2011), 671–708.
  • La Porta, R., López de Silanes, F., Shleifer, A., Corporate ownership around the world. J. Finance 54:2 (1999), 471–517.
  • La Porta, R., López de Silanes, F., Shleifer, A., Vishny, R.W., Investor protection and corporate governance. J. Financ. Econ. 58:1—2 (2000), 3–27.
  • La Porta, R., López de Silanes, F., Shleifer, A., Vishny, R.W., Investor protection and corporate valuation. J. Finance, 57(3), 2002 1.147–1.170.
  • Laeven, L., Levine, R., Complex ownership structures and corporate valuations. Rev. Financ. Stud. 21:2 (2008), 579–604.
  • Laeven, L., Levine, R., Bank governance, regulation, and risk taking. J. Financ. Econ. 93:2 (2009), 259–275.
  • Laverty, K.J., Managerial myopia or systemic short-termism? The importance of managerial systems in valuing the long term. Manage. Decis. 42:8 (2004), 949–962.
  • Lester, S., Rethinking the international investment law system. J. World Trade 49:2 (2015), 211–222.
  • Li, J., Harrison, R.J., National culture and the composition and leadership structure of boards of directors. Corp. Gov.: Int. Rev. 16:5 (2008), 375–385.
  • Li, K., Griffin, D.W., Yue, H., Zhao, L., How does culture influence corporate risk-taking?. J. Corp. Finance 23 (2013), 1–22.
  • Lumpkin, G.T., Brigham, K.H., Moss, T.W., Long-term orientation: Implications for the entrepreneurial orientation and performance of family businesses. Entrep. Reg. Dev. 22:3–4 (2010), 241–264.
  • Maury, B., Pajuste, A., Multiple large shareholders and firm value. J. Bank. Finance, 29(7), 2005 1.813-1.834.
  • McCleary, R.M., Barro, R.J., Religion and economy. J. Econ. Perspect. 20:2 (2006), 49–72.
  • McSweeney, B., Hofstede's model of national cultural differences and their consequences: a triumph of faith – a failure of analysis. Hum. Relat. 55:1 (2002), 89–117.
  • Meier-Pesti, K., Penz, E., Sex or gender? Expanding the sex-based view by introducing masculinity and femininity as predictors of financial risk taking. J. Econ. Psychol. 29:2 (2008), 180–196.
  • Merdad, H., Hassan, M.K., Hippler, W.J., The Islamic risk factor in expected stock returns: an empirical study in Saudi Arabia. Pac. Basin Financ. J.(34), 2015, 293–414.
  • Michalopoulos, S., Naghavi, A., Prarolo, G., Islam, inequality and pre-industrial comparative development. J. Dev. Econ. 120 (2016), 86–98.
  • Mihet, R., Effects of culture on firm risk-taking: a cross-country and cross-industry analysis. J. Cult. Econ. 37:1 (2013), 109–151.
  • Miller, A., Hoffman, J., Risk and religion, an explanation of gender differences in religiosity. J. Sci. Study Relig. 34 (1995), 63–75.
  • Miller, A.S., Conventional religious behaviour in modern Japan: a service industry perspective. J. Sci. Study Relig. 31 (1992), 207–214.
  • Miller, A.S., A rational choice model for religious behaviour in Japan. J. Sci. Study Relig. 34 (1995), 234–244.
  • Minkov, M., Hofstede, G., Nations versus religions: which has a stronger effect on societal values?. Manage. Int. Rev. 54:6 (2014), 801–824.
  • Morck, R., Wolfenzon, D., Yeung, B., Corporate governance, economic entrenchment, and growth. J. Econ. Lit. 43:3 (2005), 655–720.
  • Naldi, L., Nordquist, M., Sjoberg, K., Wiklund, J., Entrepreneurial orientation, risk taking, and performance in family firms. Fam. Bus. Rev. 20 (2007), 33–58.
  • Nguyen, P., Corporate governance and risk taking: evidence from Japanese firms. Pac. Basin Finance J. 19:3 (2011), 278–297.
  • Novales, A., Salmerón, R., García, C.B., García, J., López, M.M., Tratamiento de la multicolinealidad aproximada mediante variables ortogonales. An. Econ. Apl., 2015, 1212–1227.
  • Pan, Y., Siegel, S., Wang, T.Y., Corporate risk culture. J. Financ. Quant. Anal. 52:6 (2017), 2327–2367.
  • Parsons, T., Shils, E.A., Toward a General Theory of Action. 1951, Harvard University Press, Cambridge (MA), United States.
  • Pathan, S., Strong boards, CEO power and bank risk-taking. J. Bank. Finance 33:7 (2009), 1340–1350.
  • Reuter, C.H., A survey of ‘culture and finance’. Finance 32:1 (2011), 75–152.
  • Ruiz, M.V., Santana, D.J., Dominant institutional owners and firm value. J. Bank. Finance 35 (2011), 118–129.
  • Saad, G., Gill, T., Applications of evolutionary psychology in Marketing. Psychol. Mark. 17:12 (2000), 1005–1034.
  • Salaber, J., Religion and returns in Europe. Eur. J. Polit. Econ. 32 (2013), 149–160.
  • Salmerón, R., García, J., García, C.B., García, C., Treatment of collinearity through orthogonal regression: an economic application. Bol. Estad. Investig. Oper. 32:3 (2016), 184–202.
  • Sanchirico, C.W., As American as Apple Inc.: international tax and ownership nationality. Tax Law Rev. 68 (2015), 207–274.
  • Schwartz, S.H., Beyond Individualism/Collectivism: New Cultural Dimensions of Values. 1994, Sage Publications, Inc.
  • Schwartz, S.H., Mapping and interpreting cultural differences around the world. Vinkins, H, Soeters, J, Esters, P, (eds.) Comparing Cultures: Dimensions of Culture in a Comparative Perspective, 2004, Brill Academic Publishers, Boston, MA.
  • Shleifer, A., Vishny, R., Large shareholders and corporate control. J. Polit. Econ. 94 (1986), 461–488.
  • Shu, T., Sulaeman, J., Yeung, P.E., Local religious beliefs and organizational risk-taking behaviors. University of Georgia Working Paper, 2011.
  • Smith, A., Raphael, D.D., Macfi, A.L., (eds.) The theory of moral sentiments, 1976, Clarendon, Oxford.
  • Smith, C., Watts, R., The investment opportunity set and corporate financing, dividend, and compensation policies. J. Financ. Econ. 32:3 (1992), 263–292.
  • Stark, R., Bainbridge, W.S., A Theory of Religion. 1987, Peter Lang, New York.
  • Stulz, R., Williamson, R., Culture, openness, and finance. J. Financ. Econ. 70 (2003), 313–349.
  • Sutton, S.K., Davidson, R.J., Prefrontal brain asymmetry: a biological substrate of the behavioral approach and inhibition systems. Psychol. Sci. 8:3 (1997), 204–210.
  • Tsai, H.F., Luan, C.J., What makes firms embrace risks? A risk-taking capability perspective. Bus. Res. Q. 19 (2016), 219–231.
  • Villalonga, B., Amit, R., How do family ownership, control, and management affect firm value?. J. Financ. Econ. 80:2 (2006), 385–417.
  • Voll, J.O., Islam: Continuity and Change in the Modern World. 1982, Westview, Boulder (CO), United States.
  • Weber, E.U., Blais, A.R., Betz, N.E., A domain specific risk-attitude scale: measuring risk perceptions and risk behaviors. J. Behav. Decis. Mak. 15 (2002), 263–290.