Abstract
In this paper we investigate the relation between trade credit provision and national culture as captured by Hofstede’s four cultural dimensions (collectivism/ individualism, power distance, uncertainty avoidance, and masculinity/femininity). Consistent with our predictions based on several theories of trade credit, we find that after controlling for firm- and country-level factors as well as industry effects, trade credit provision is higher in countries with higher collectivism, power distance, uncertainty avoidance, and masculinity scores. These results are robust to using alternative measures of culture and trade credit, alternative sample compositions, and alternative estimation methods, as well as to addressing potential endogeneity concerns. International trade openness, however, mitigates the relation between trade credit provision and our proxies for national culture.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
