The moderating effects of national culture on escalation of commitment

Stephen B. Salter, David J. Sharp and Yasheng Chen

Advances in accounting, 2013, vol. 29, issue 1, 161-169

Abstract: This study tests the cross-cultural sensitivity of three determinants of escalation of commitment: agency conditions, negative framing, and self-justification. A multiple-case experiment, using a sample of 1208 managers and MBA students surveyed over several years in nine countries investigated the moderating effects of national culture. We find that the effect of negative framing on escalation of commitment is significant, but unaffected by differences in national cultures. The adverse selection problem arising from agency predictions has a stronger effect in high-individualism countries than in low-individualism countries, and managers in higher long-term orientation countries are more likely to escalate projects with potential long-term payoffs.

Keywords: Escalation of commitment; Hofstede; Culture; Agency theory; Prospect theory (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0882611013000023
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:29:y:2013:i:1:p:161-169

DOI: 10.1016/j.adiac.2013.02.001

Access Statistics for this article

Advances in accounting is currently edited by Dennis Caplan

More articles in Advances in accounting from Elsevier
Bibliographic data for series maintained by Catherine Liu ().