Managers' individualistic culture and trade credit

Yonggen Luo, Na Tian, Dongmin Kong and Huijie Cui

Emerging Markets Review, 2025, vol. 66, issue C

Abstract: Culture is formed as a response to the demands of the environment. We investigate how managers' individualistic culture affects firms' trade credit. Our findings show a positive link between the two. Cross-sectional analyses demonstrate that the positive relation is enhanced in regions with better legal systems but attenuated if the firm has a higher supplier concentration. To address the concern of endogeneity, we adopt an instrumental variable approach. Our findings remain in robustness checks. Overall, this paper takes a deep dive into the chairperson's farming culture in developing countries and reveals how this informal tradition is priced into corporate decisions.

Keywords: Culture; Individualism; Trade credit; Legal system; Supplier concentration (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:66:y:2025:i:c:s1566014125000275

DOI: 10.1016/j.ememar.2025.101278

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