Abstract
This study unfolds the role of national culture in determining the firm financial performance through channel of corporate financial policy. Sample size consists of 7623 non-financial sector firms ...
Highlights
Culture has crucial role in dynamic business decisions
In current dynamic business environment, the objective to achieve the maximum corporate financial efficiency connects with technolo gical innovation or transparent functioning of business practices, but it relates with countrylevel factors, i.e., national level culture
Prior studies have significantly suggested the impact of national culture on firm-level financial policies (Chang et al, 2012), but this study extends the analysis how change in financing decision due to national culture further determines the firm financial efficiency
Summary
Culture has crucial role in dynamic business decisions. Different management practices at corpo rate level adhered with cultural values which change the decision-making practices of corporate managers. Prior research has proven that the national culture affect the financing decision and it was evidenced from literature that the change in capital structure has strong effect on firm financial performance. Theoretical discussion There are different firm-level decisions which alternatively affect the corporate financial perfor mance i.e. financing decision, investment decision and dividend payout decision etc Out of these business decisions, capital structure decision has major role in determining the firm perfor mance (Nenu et al, 2018). Resource dependency theory focuses on the attitude of executives regarding the resource arrangements that firms needed for business activities This theory links the national culture with financing as more risk averse managers reluctant to acquire the external financing and rely more on internal funds which directly achieve the financial performance both positively and negatively. The firms were selected from different sectors and different countries, so it was necessary to fix the cross section and to eradicates the problem of crosssectional dependency
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