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New evidence on national culture and bank capital structure

Lookup NU author(s): Dr Shams PathanORCiD

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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.

Publication metadata

Author(s): Haq M, Hu D, Faff R, Pathan S

Publication type: Article

Publication status: Published

Journal: Pacific Basin Finance Journal

Year: 2018

Volume: 50

Pages: 41-64

Print publication date: 01/09/2018

Online publication date: 29/09/2017

Acceptance date: 14/09/2017

ISSN (print): 0927-538X

Publisher: Elsevier BV

URL: https://doi.org/10.1016/j.pacfin.2017.09.005

DOI: 10.1016/j.pacfin.2017.09.005

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