test
Search publications, data, projects and authors

Free full text available

Article

English

ID: <

10670/1.3zdjfm

>

Where these data come from
Culture and Capital Structure : What Else to the Puzzle?

Abstract

International audience This paper investigates four of Hofstede's cultural dimensions-individualism, masculinity, uncertainty avoidance, and long-term orientation-influence on firms' choices of short-term and long-term capital structures. Cultures influence on corporate risk-taking may drive their debt-to-equity mix based on the higher of their equity book or market value. We empirically test culture influence with a sample of 5968 firms from five industry sectors, across 33 countries, over 2009-2017. We find firms national culture influencing their choices of short-term and long-term debt to book and market value of equity. The influence is more significant on the short-term than the long-term capital structures. Furthermore, it is more significant on the short-term debt to market value of equity and on the long-term debt to book value of equity. Our robustness checks at the firm-level, country-level and sample-level confirm and reinforce our main results. These findings would provide financial analysts, investors, and creditors an in-depth understanding when comparing international firms' capital structures.

Your Feedback

Please give us your feedback and help us make GoTriple better.
Fill in our satisfaction questionnaire and tell us what you like about GoTriple!