New evidence on national culture and bank capital structure
Citation
Haq, M. and Hu, D. and Faff, R. and Pathan, S. 2018. New evidence on national culture and bank capital structure. Pacific Basin Finance Journal. 50: pp. 41-64.
Source Title
Pacific Basin Finance Journal
ISSN
Faculty
Faculty of Business and Law
School
School of Economics, Finance and Property
Collection
Abstract
© 2017 Elsevier B.V. We examine the nature of impact of national culture on bank leverage using a broad sample of 1701 banks from 79 countries, over the period 2000–2013, i.e., 18,996 bank-year observations. We find that banks in countries with high individualism culture dimensions hold more leverage while, banks in countries with high uncertainty-avoidance, power distance, and long-term orientation have less leverage. Notably, bank size substantially moderates these cultural effects. Our findings are robust to endogeneity, and alternative proxies for the dependent and core explanatory variables.
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