Cultural adaptation and corporate investment decisions: evidence from inter-regional investments

Dan Li, Tusheng Xiao and Chun Yuan

China Journal of Accounting Studies, 2023, vol. 11, issue 3, 631-659

Abstract: Corporate inter-regional investment is an important channel for building the domestic economic cycle. This paper explores the impact of firms’ adaptation to regional culture on inter-regional investment based on the sample of newly-established inter-province subsidiaries of A-share listed firms in China from 2006 to 2017. We find that (1) Firms’ low cultural adaptation to home region promote corporate inter-regional investment. (2) Firms are more likely to invest in regions with cultural environments that are more compatible with their own culture value (3) Firms have better investment performance when investing in more culturally adapted regions through better cooperating with new stakeholders and reducing management cost. (4) The impact of cultural adaptation on inter-regional investments is also affected by the state ownership and corresponding regional formal institutions. Our findings have implications for firms to make location choice during inter-regional investment and can help governments attract capital flows.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/21697213.2023.2239668 (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:taf:rcjaxx:v:11:y:2023:i:3:p:631-659

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rcja20

DOI: 10.1080/21697213.2023.2239668

Access Statistics for this article

China Journal of Accounting Studies is currently edited by Xiaochen Dou

More articles in China Journal of Accounting Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().