Corporate Culture and Investment–Cash Flow Sensitivity
Fuxiu Jiang (),
Kenneth Kim,
Yunbiao Ma (),
John R. Nofsinger () and
Beibei Shi ()
Additional contact information
Fuxiu Jiang: Renmin University of China
Yunbiao Ma: Renmin University of China
John R. Nofsinger: University of Alaska Anchorage
Beibei Shi: University of International Business and Economics
Journal of Business Ethics, 2019, vol. 154, issue 2, No 9, 425-439
Abstract:
Abstract Can firms overcome credit constraints with a corporate culture of high integrity? We empirically address this question by studying their investment–cash flow sensitivities. We identify firms with a culture of integrity through textual analysis of public documents in a sample of Chinese listed firms and also through corporate culture statements. Our results show that firms with an integrity-focused culture have lower investment–cash flow sensitivity, even after we address endogeneity concerns. However, we also find that for the culture to reduce the investment–cash flow sensitivity, external stakeholders must be able to verify this culture through a low information asymmetry environment. Overall, our findings show that a corporate culture of high integrity can mitigate a firm’s external transaction costs.
Keywords: Corporate culture; Integrity; Investment–cash flow sensitivity (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)
Downloads: (external link)
http://link.springer.com/10.1007/s10551-017-3444-3 Abstract (text/html)
Access to full text is restricted to subscribers.
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:kap:jbuset:v:154:y:2019:i:2:d:10.1007_s10551-017-3444-3
Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10551/PS2
DOI: 10.1007/s10551-017-3444-3
Access Statistics for this article
Journal of Business Ethics is currently edited by Michelle Greenwood and R. Edward Freeman
More articles in Journal of Business Ethics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().