Cultural values of parent bank board members and lending by foreign subsidiaries: The moderating role of personal traits

Iftekhar Hasan, Krzysztof Jackowicz, Oskar Kowalewski () and Łukasz Kozłowski
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Krzysztof Jackowicz: Department of Banking, Insurance and Risk, Kozminski University
Łukasz Kozłowski: Department of Banking, Insurance and Risk, Kozminski University

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Abstract: In this study, we investigate whether the cultural values of a parent bank's board members affect lending by the bank's foreign subsidiaries and how this influence is moderated by the board members' personal traits. Using a new dataset on foreign-owned banks and their parent companies, we find that average individualism, uncertainty avoidance, and indulgence within parent bank boards significantly impact lending by foreign subsidiaries. We establish that different sensitivities of female and male directors modify the relevance of individual cultural dimensions in lending by foreign bank subsidiaries. Moreover, we show that parent bank directors' cultural values have a stronger impact on lending by the bank's foreign subsidiaries when those directors have enough time to fulfill their duties and possess higher ownership stakes in the parent companies.

Date: 2023-03
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Published in Journal of International Financial Markets, Institutions and Money, 2023, 83, pp.101736. ⟨10.1016/j.intfin.2023.101736⟩

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Journal Article: Cultural values of parent bank board members and lending by foreign subsidiaries: The moderating role of personal traits (2023)
Working Paper: Cultural values of parent bank board members and lending by foreign subsidiaries: The moderating role of personal traits (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04127844

DOI: 10.1016/j.intfin.2023.101736

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