The Impact of Socio-Cultural Factors on the Business Environment

Abstract

The aim of this paper is to understand the importance of the influence of socio-cultural factors on business performance. Society and culture have a significant impact on business environment. Cultural and social differences between countries are a challenge for managers, as they need to acquire intercultural competence and to anticipate the impact of all socio-cultural factors. The study was carried out over the period 2010-2020 on a sample of 28 countries in Europe, the results showing that social factors such as education, government spending on R&D or health in GDP or the Gini indicator of population income inequality, as well as cultural factors such as corruption, the rule of law, the companies’ innovation level significantly influence their income and their prospects of doing business in that state.