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Cultural determinants of ownership concentration across countries

Eelke De Jong and Radislav Semenov

International Journal of Business Governance and Ethics, 2006, vol. 2, issue 1/2, 145-165

Abstract: Industrialised countries differ significantly in predominant patterns of ownership of publicly listed firms. In particular, in some countries most firms have a dominant shareholder while in other countries the ownership of a great majority of firms is dispersed; in some countries a significant proportion of shares of many firms is held by stable long-term shareholders while in others investors orientated on short-term return play a dominant role. We suggest that these cross-country differences may be explained by differences in values held by people of these countries. Using the cultural dimensions identified by Geert Hofstede as indicators of these values, we identify, theoretically, the likely effects of national cultures on ownership patterns, and test these redictions empirically. The results of the tests confirm our expectations. Differences in ownership patterns are related to differences in values, with differences in attitude towards uncertainty proving to have the most significant impact on ownership patterns.

Keywords: cross-country studies; culture; values; investor protection; ownership patterns; shareholders; corporate ownership; stakeholders; stock market; corporate governance; ownership structure. (search for similar items in EconPapers)
Date: 2006
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