Does political risk affect corporate culture?

Gang Zhao, Shengyan Xu and Li Sun

Research in International Business and Finance, 2025, vol. 78, issue C

Abstract: Using a sample encompassing 52,707 firm-year observations for the period of 2002–2021, we investigate the influence of political risk on culture at the company level. Our analysis reveals a significant and positive relation between company-level political risk and corporate culture, indicating that public companies facing heightened political risk tend to exhibit a more robust corporate culture. This evidence highlights the significance of a strong corporate culture in bolstering firm performance and reducing the adverse effects of political uncertainty. Furthermore, our research indicates that the positive link between company-level political risk and corporate culture is amplified for companies with weaker earnings performance.

Keywords: Political risks; Corporate culture; Earnings performance (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:78:y:2025:i:c:s0275531925002442

DOI: 10.1016/j.ribaf.2025.102988

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