National Culture and Financial Systems

Solomon A. Tadesse () and Chuck Kwok ()

No wp884, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan Stephen M. Ross Business School

Abstract: Countries differ in the way their financial activities are organized. In Anglo-Saxon countries such as the U.S. and the U.K., financial systems are dominated by stock markets whereas in Continental Europe and Japan, banks play a predominant role. Why do countries differ in the configuration of their financial systems? We argue that national culture plays a significant role. We find that countries characterized by higher uncertainty avoidance, as an attribute of their national culture, are more likely to have a bank-based system.

Keywords: Financial Systems; Bank-based; Market based; Culture; Uncertainty Avoidance (search for similar items in EconPapers)
JEL-codes: G1 G2 P51 Z1 (search for similar items in EconPapers)
Date: Written 2005-03-01

Downloads: (external link)
http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp884.pdf

Related works:
Journal Article: National culture and financial systems (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Access Statistics for this paper

More papers in William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan Stephen M. Ross Business School
Contact information at EDIRC.
Series data maintained by Patricia Loh ().