New evidence on national culture and bank capital structure
Robert Faff and
Shams Pathan ()
Pacific-Basin Finance Journal, 2018, vol. 50, issue C, 41-64
We examine the nature of impact of national culture on bank leverage using a broad sample of 1701 banks from 79 countries, over the period 2000–2013, i.e., 18,996 bank-year observations. We find that banks in countries with high individualism culture dimensions hold more leverage while, banks in countries with high uncertainty-avoidance, power distance, and long-term orientation have less leverage. Notably, bank size substantially moderates these cultural effects. Our findings are robust to endogeneity, and alternative proxies for the dependent and core explanatory variables.
Keywords: Bank leverage; National culture; Individualism; Power distance; Uncertainty avoidance; Long-term orientation; Endogeneity (search for similar items in EconPapers)
JEL-codes: G01 G21 G28 G32 G38 H63 M14 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:50:y:2018:i:c:p:41-64
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