National culture and leverage adjustments

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Svetlana Orlova ◽  
Grant Harper

PurposeThe purpose of this paper is to explore the impact of national culture on leverage speed of adjustment (SOA) across countries.Design/methodology/approachWe use a partial adjustment model to estimate the impact of national culture (assessed using Hofstede's six cultural dimensions) on leverage SOA.FindingsWe find that culture does significantly affect the degree to which firms deviate from target debt level and the speed of adjustment (SOA) of leverage. High power distance, individualism and masculinity are associated with a slower SOA, while high long-term orientation, uncertainty avoidance and indulgence result in a faster SOA. Additionally, cultural characteristics affect leverage SOA differently when firms are underlevered versus overlevered and when firms have small versus large deviations from the target level of debt. We suggest that these effects can be explained by agency motives.Research limitations/implicationsThe results of the study are based on available information for firms from 53 countries.Originality/valueThis study is, to the best of our knowledge, the first to examine the impact of national cultural traits on leverage SOA in international settings.

Author(s):  
Mieczysław Kowerski ◽  
Marcin Sowa

Lintner’s (1956) partial adjustment model identifies the company’s long-term dividend policy by setting a dividend target payout ratio and the speed of adjustment. And although the model has undergone various modifications and methods of estimation over more than 60 years, it is still a good tool for analyzing dividend decisions made by companies. The aim of the article is to show the usefulness of the Lintner model for analyzing changes in the company’s dividend policy during the pandemic turmoil. For the illustration, Hydrotor SA was chosen, which, the longest time at the Warsaw Stock Exchange, continuously pays dividends. The calculations showed that the situation in 2020 resulted in a revision of the company’s long-term dividend strategy, which resulted in a lowering of the dividend target payout ratio and a greater attention to the current situation (current net profits)—an increase in the speed of adjustment.  


2019 ◽  
Vol 26 (4) ◽  
pp. 546-566
Author(s):  
Raquel Orcos ◽  
Sergio Palomas

Purpose The purpose of this paper is to explore how national cultures contribute to explain the uneven diffusion of ISO 14001 across countries. The paper focuses on two of the cultural dimensions developed by the global leadership and organizational behavior effectiveness (GLOBE) project, namely, performance orientation and institutional collectivism. Design/methodology/approach A database containing information about the diffusion of ISO 14001 in 52 countries during the period 1999–2016 was built to carry out this research. The countries considered in this study represent about 90 percent of worldwide ISO 14001 certifications. The information was gathered from publicly available data sources: the ISO Survey, published every year by the International Organization for Standardization, the world development indicators of the World Bank, the cultural dimensions of the GLOBE project and the Index of Economic Freedom provided by The Heritage Foundation. Findings This research finds that both performance orientation and institutional collectivism influence the diffusion of ISO 14001. Whereas performance orientation slows down the diffusion of ISO 14001, institutional collectivism speeds it up. Additionally, this research shows that the slowing effect of performance orientation decreases in strength over time, while the accelerating effect of institutional collectivism becomes stronger. Originality/value The study adds to the understanding of the influence of national culture on the diffusion of environmental management standards, with an emphasis on ISO 14001. A key contribution of this research is that it explores how the influence of cultural dimensions change over time as a result of the development and maturation of ISO 14001.


2014 ◽  
Vol 12 (2) ◽  
pp. 161-176 ◽  
Author(s):  
Dessalegn Getie Mihret

Purpose – The purpose of this paper is to test the association between national culture dimensions and exposure to fraud with a view to drawing implications for understanding fraud risk. Design/methodology/approach – The study is based on a sample of 66 countries. Regression analysis is conducted using Hofstede’s national culture dimensions as independent variables and fraud risk as a dependent variable. Transparency International’s corruption index was used as a proxy for fraud risk. Findings – Results suggest high fraud risk exposure in countries with high power distance and those having limited long-term orientations. Research limitations/implications – The study informs deeper understanding of fraud risk through analysis of fraud risk in a culturally relative sense. Originality/value – This is the first study (known to the author) to draw the implications of national culture for understanding fraud risk.


2018 ◽  
Vol 35 (1) ◽  
pp. 93-112 ◽  
Author(s):  
Tribikram Budhathoki ◽  
Julien Schmitt ◽  
Nina Michaelidou

Purpose To better understand the disparity of private label performance across countries, the purpose of this paper is to investigate the role played by national culture. Two types of impact are considered: a direct influence of cultural dimensions on the performance of private labels in a country and an indirect one where national culture favours the development of modern retailers, which, in turn, benefits private label performance. Design/methodology/approach Using the five dimensions of the Hofstede model to describe national culture, this paper performs a structural equation modelling incremental building model approach using secondary data collected from a sample of 65 countries. Findings The results show that individualism (positively) and long-term orientation (negatively) directly impact private label performance. Moreover, four dimensions (individualism, masculinity, power distance and uncertainty avoidance) are shown to have a significant indirect impact on private label performance via the mediation of retail market development, positively for individualism and negatively for the three other dimensions. Practical implications The findings provide retailers with important insights into the critical decisions of the selection of new markets and adaptation of the private label strategy according to the culture of the country. Originality/value This research pioneers by being the first to determine the impact of all the dimensions of the Hofstede cultural model on private label performance, use a very large number of countries to test this impact and study the role of important retail market factors in this phenomenon.


2019 ◽  
Vol 22 (2) ◽  
pp. 373-387
Author(s):  
Ahmed Yamen ◽  
Anas Al Qudah ◽  
Ahmed Badawi ◽  
Ahmed Bani-Mustafa

Purpose Despite the existence of laws, regulations and sanctions, financial crime remains widespread. The Panama leaks have proven that people from all over the world are participating in money laundering and other financial crimes. This study aims to investigate the influence of national culture on financial crimes across 78 countries. Design/methodology/approach This study uses Hofstede’s cultural framework as a basis for its hypotheses on financial crime. It also uses the Basel anti-money laundering index as a proxy for measuring the incidence of financial crime across the countries under review. Findings The findings show that countries whose cultural profiles are characterized by low uncertainty avoidance, low individualism, high masculinity and low long-term orientation have high rates of financial crime. The finding also shows that countries whose cultural profiles are characterized by individualism or positive collectivism, uncertainty avoidance and long-term orientation have low rates of financial crime. Originality/value Laws, regulations and sanctions are not the only factors that can help deter the crime; governments should also take a holistic approach that includes the cultural factors that encourage deterrence.


2020 ◽  
Vol 58 (8) ◽  
pp. 1563-1583 ◽  
Author(s):  
Michele Rubino ◽  
Filippo Vitolla ◽  
Nicola Raimo ◽  
Isabel-Maria Garcia-Sanchez

PurposeThis study investigates the relationship between national culture and the country level of firms' digitalisation, by applying Hofstede's cultural framework to the European Union member states. Although many studies have observed the impact of national culture on firms' innovation and information and communication technology (ICT) adoption, there have been no analyses of how cultural dimensions impact firms' digitalisation at the country level. This study intends to fill that gap.Design/methodology/approachUsing a pooled ordinary least square (OLS) model, this study analyses data from 27 European countries over the period from 2014 to 2018.FindingsThe results suggest the existence of a negative, significant, relationship between both masculinity and uncertainty avoidance, and the country level of firms' digitalisation. Indulgence is found to positively and significantly influence a country's level of digitalisation. Contrary to expectations, this study indicates a negative, significant, relationship between individualism and the degree of digitalisation. Power distance is found to have no significant impact.Originality/valueThis study contributes to the literature by showing how a country's various cultural dimensions help or hinder the level of firms' digitalisation in that country. Theoretical and managerial implications are presented, including suggestions for future research.


Author(s):  
Marcello Risitano ◽  
Ilaria Tutore ◽  
Annarita Sorrentino ◽  
Michele Quintano

Purpose The impact of national culture on tourist behavior has been analyzed in several studies, but none of them focused on its discriminating impact on behavioral intentions during a mega-event. Using Hofstede’s cultural dimensions, this paper aims to explore the influence of national cultural values on tourist behaviors (experience, satisfaction and behavioral intentions) during the America’s Cup World Series (ACWS) in Naples. Design/methodology/approach The paper presents a quantitative analysis of primary data gathered through a survey of a convenience sample of tourists (n = 612) conducted during the ACWS organized by the City of Naples in April 2013. Findings The findings confirm that national cultural clusters represent an important driver of behavioral intentions: tourists from different geographic clusters showed different intention to return and intention to recommend by word of mouth, caused by different levels of individualism and uncertainty avoidance. Practical implications For destination marketing managers, this study throws light on how the national culture of tourists may influence their experiences and behavioral intentions. Originality/value Despite the richness of works on the tourism experience, few studies have investigated the effect of national culture on tourists’ experience, satisfaction and behavioral intentions during and after a sport mega-event.


2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Marta Valverde-Moreno ◽  
Mercedes Torres-Jimenez ◽  
Ana M. Lucia-Casademunt

Purpose There is a growing consensus among human resources researchers and professionals that a participative environment can enhance job satisfaction, commitment, employee motivation and productivity. Moreover, globalization has caused that organizations operate in a huge number of culturally diverse countries. Studies suggest that understanding national culture as a prerequisite to implementing management initiatives such as employee participation in decision-making (PDM) acquires special interest. Therefore, the purpose of this study is to investigate the influence of cultural values on PDM in European organisations. The fulfilment of this purpose entails the following specific objectives: to measure the level of PDM in each European country; to examine the relationship between the six cultural dimensions proposed by Hofstede in 2010 (power distance, uncertainty avoidance, individualism/collectivism, masculinity/feminity, long term/short term and indulgence) and the PDM level of the organisations studied; and to define the national cultural profile of organisations that promote PDM the most and those that do the least. Design/methodology/approach One factor analysis were applied to test the proposed hypotheses on a sample of almost 25,000 workers in 31 European countries (from the 6th European Working Conditions Survey) to identify direct employee PDM corresponding to each organisation included in the sample. Multiple linear regression was performed to test the hypotheses about the relationship between PDM and Hofstede culture values. Previously, a correlation analysis was performed between the independent variables of the regression model to examine the possibility of bias in coefficient significance tests because of multicollinearity. Finally, it presented a ranking of the analysed countries according to their PDM, including the value of their cultural dimensions. This information could be used to define the cultural profile of European participative countries. Findings The findings advance our understanding of how culture influencing on employee PDM in European organisations. Indulgence and masculinity are the most influent cultural dimensions. Moreover, results provide the cultural profile of those European countries that promote PDM the most and the least. Research limitations/implications The research is based only on the perceptions of workers about their PDM but does not consider the managers’ opinion. Moreover, the document analyses the national culture as a single value shared by all the inhabitants of a country without considering the subcultures existing in it. Furthermore, future research should be conducted to analyse the influence of other conditions (such as activity sector, company size and owner public or private) on PDM–culture relationship. Practical implications This study can be aid to managers in understanding the cultural profile of the country where their companies operate and the cultural differences between their employees. In this manner, they could implement the appropriate practices to promote the direct participation of employees in decision-making. Originality/value To broaden the knowledge, this is the first study investigating PDM across six cultural dimensions. The globalized and international business environment generates new challenges to multinational organizations that could pursue to increase direct PDM to get its benefits (a higher efficiency, performance, motivation, commitment and loyalty by the employee) in culturally diverse societies. The cultural values of the countries where organizations are located affect direct employee PDM. In particular, in this study, this occurs primarily with the variables masculinity, long-term orientation and indulgence. Moreover, this is a finding of high relevance because there is no empirical evidence in the effect of indulgence and long-term orientation on PDM because they were added later to Hofstede’s values.


2015 ◽  
Vol 15 (1) ◽  
pp. 17-47 ◽  
Author(s):  
Laura Le Luo ◽  
Qingliang Tang

ABSTRACTThis study examines the influence of culture on management's response to the challenge of climate change, as manifested in firms' voluntary participation in carbon disclosure via the Carbon Disclosure Project (CDP). We argue that national culture impacts managerial attitudes and philosophies about environmental protection and thus affects the willingness as well as the extent to which managers recognize the need for emissions control and disclosure. Based on a sample of 1,762 firms from 33 countries, we find that cultural dimensions of masculinity, power distance, and uncertainty avoidance are strongly and consistently related to carbon disclosure propensity, regardless of whether G. Hofstede, G. J. Hofstede, and Minkov (2010) or Global Leadership and Organizational Behaviour Effectiveness (GLOBE) culture measures are used. Our results also show individualism and long-term orientation has significant impact under the Hofstede measure, although not under GLOBE measures, after controlling for other compounding factors. In addition, our evidence implies that national culture may moderate the effect of carbon control mechanisms, such as emissions trading schemes. Finally, the empirical evidence indicates that the impact of culture is not sensitive to national wealth and industry membership. The findings suggest culture exerts incremental influences beyond economic and regulatory incentives and therefore should be adequately considered in the combat against global warming and particularly in negotiations for an international climate agreement that is more acceptable to societies with disparate cultural backgrounds.


2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Henry Adobor

Purpose This paper aims to argue that national cultural context variables influence open strategy formation processes. This study suggests that country-specific differences may influence open strategy, a form of strategic decision-making and present propositions linking national culture dimensions, national trust orientation and open strategy. Design/methodology/approach The conceptual framework links the literature on Hofstede’s cultural dimensions to the open strategy paradigm. This paper adopts a contingency approach linking national culture to open strategy. Findings The theoretical arguments demonstrate that uncertainty avoidance, time orientation, power distance, individualism versus collectivism and national trust culture all have a moderating influence on the antecedents and outcomes of open strategy. The findings extend the external validity of the open strategy paradigm and show that a culture-bound explanation of open strategy may be useful to the understanding of open strategy. Practical implications The findings highlight the challenges and opportunities that managers face when they adopt open strategy processes in multinational settings and across different cultures. Managers need to be aware that national cultural variables affect how employees behave and how they are likely to act when faced with opportunities for inclusion, shared decision-making and transparency. The findings suggest that training employees ahead of time on the cultural effects of their behavior may aid the successful adoption of open strategy in different cultures. Originality/value This manuscript to our knowledge, maybe one of the first to make a direct link between openness and national cultural values. In the process, the conceptual framework extends research on the role of context on openness, as well as research at the nexus of cross-cultural issues and strategic decision-making.


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