Effect Of Uncertainty Avoidance Research Articles

Uncertainty avoidance and investment underdiversification.

The relationship between the cultural dimension of uncertainty avoidance and investment underdiversification is examined. A theoretical link between uncertainty avoidance and ambiguity is established, that is, cultural uncertainty avoidance captures the aversion attitude towards ambiguity at the national group level, thus, cultural dimension of uncertainty avoidance influences investors’ behavioral biases of home bias and the investment abroad concentration. The empirical results show that investment underdiversification is significantly and positively affected by the degree of uncertainty avoidance and robustness tests support this conclusion. A further analysis reveals that uncertainty avoidance moderates the effects of ambiguity on investment underdiversification, whereas the effects of uncertainty avoidance are mediated by the status quo bias.

National culture and audit report lag: cross-country investigation

PurposeThis study aims to investigate the effect of national culture (power distance, individualism, masculinity, uncertainty avoidance and long-term orientation) on audit report lag.Design/methodology/approachThe authors use two econometric approaches (ordinary least squares (OLS) and quantile regression) using STATA software for a sample of 1,208 firm-year observations over the period of 2017–2018.FindingsUsing Hofstede’s (2001) cultural dimensions (power distance, individualism, masculinity, uncertainty avoidance and long-term orientation), the authors find that masculinity and long-term orientation are positively associated with audit report lag, while uncertainty avoidance is negatively associated with the same variable. Quantile regressions suggest that the adverse effect of masculinity on audit report lag is more prevailing for companies communicating companies' annual reports in a timely manner. Furthermore, the positive association between power distance and audit report lag exists only under tardy disclosure regime. Quantile regressions also confirm that the negative (positive) effect of uncertainty avoidance (long-term orientation) on audit report lag is maintained under different timely disclosure regime. Additional analysis conducted with respect to legal system shows that individualism becomes a significant predictor of audit delays with a significant negative effect for common law countries, while uncertainty avoidance has a positive effect on the same variable in civil law countries characterized by high level of discretion and secrecy.Practical implicationsThe results of this study suggest that national culture as an informal institution may complement formal institutions (e.g. financial markets) in promoting timely disclosure. For instance, foreign investors may view high uncertainty avoidance scores, in common law emerging economies, as an indicator of transparency and timely disclosure.Originality/valueThis study adds to the extant literature a further understanding of the impact of cultural dimensions on timely disclosure, as proxied by, audit report lag. The use of quantile regression approach shows how different timely disclosure regime may affect the association between masculinity, power distance and audit report lag.

National culture and earnings management in developed and emerging countries

PurposeThis study investigates how the association between national culture and earnings management compares between developed and emerging countries.Design/methodology/approachThe empirical analysis relies on a sample of 6,313 firm-year observations from 11 emerging markets and 27,605 firm-year observations from 22 developed countries. The authors use ordinary least squares regression methods to test the hypotheses of the study.FindingsBased on Hofstede's (2011) cultural dimensions, the authors find that firms from countries with a higher level of uncertainty avoidance and individualism are less likely to engage in earnings management, but the effect of uncertainty avoidance (individualism) is more (less) pronounced in the emerging countries. Moreover, the authors demonstrate that firms from emerging (developed) countries with higher levels of power distance and masculinity are less (more) likely to engage in earnings management. Finally, the authors find evidence of a trade-off between accruals-based and real earnings management in firms from countries with greater long-term orientation and an indulgence cultural dimension.Originality/valueThis paper adds to the literature by theoretically discussing and empirically analysing the role that developed and emerging countries' development plays on the effect of national culture on earnings management.

Social culture and innovation diffusion: a theoretically founded agent-based model

This study proposes an agent-based model to theoretically investigate the effects of social culture on innovation diffusion. The model assumes that social culture (i.e., individualism, power distance, and uncertainty avoidance from Hofstede’s cultural dimension theory) has a direct effect on the small-world network structure and individual characteristics. We further explore how the characteristics of innovation influence the diffusion process. We find that individualism has a positive effect on the diffusion speed in the early stage, whereas uncertainty avoidance and power distance have negative effects on innovation diffusion. The effect of uncertainty avoidance on the diffusion speed turns positive after the early stage of diffusion and the negative effect of power distance becomes positive in the late stage. We compare real-world diffusion data with the proposed agent-based model, finding some similarities in the diffusion patterns. The characteristics of innovation affect innovation diffusion when the uncertainty avoidance is high. However, when both uncertainty avoidance and individualism are low, the effect of the characteristics of an innovation on diffusion is restricted.

A Non‐Proxied Empirical Investigation of Cultures Effect on Corruption

ABSTRACTWe empirically examine the effect of two measures of culture, the World Values Survey and Hofstede's six dimensions, on three measures of corruption, Transparency International's CPI, the International Country Risk Guide, and the World Bank's Corruption Index. By adopting three measures of corruption and using a large data set covering many countries over many years, we offer more robust results as to the effects of aspects of culture on corruption. Using the World Values Survey, we find that Trust in society, Control over one's destiny and Respect for others decrease corruption while Obedience increases corruption. We find strong evidence that societies characterized by high Power Distance and Masculinity are more corrupt. Some evidence is found to indicate Long Term Orientation, Indulgence, and Individualism have a negative effect on corruption. The effect of Uncertainty Avoidance on corruption is unclear. The results have implications for international business leaders as well as policy makers.

광고 메시지의 애매모호성이 광고효과에 미치는 영향 : 불확실성 회피 성향과 제품유형의 조절효과를 중심으로

광고 메시지의 애매모호성이 광고효과에 미치는 영향 : 불확실성 회피 성향과 제품유형의 조절효과를 중심으로

The effect of uncertainty avoidance and social trust on supply chain collaboration

Supply chain collaboration (SCC) is strategically important in today's business world, and the use of inter-organizational systems (IOS) much facilitates SCC. The present study examines: (1) the differential effects of two types of IOS—open and closed—on firms' use of SCC; (2) the impact of a country's uncertainty avoidance and social trust on firms' use of SCC; and (3) the moderating role of uncertainty avoidance and social trust on the firm-level relationships between open/closed IOS and SCC. Using a large dataset from twenty-four countries, a multi-level analysis suggests that, not only uncertainty avoidance and social trust affect SCC directly, but uncertainty avoidance also moderates the relationship between open IOS and SCC at the firm level. These findings are important for the research and practice of SCC, as they provide novel angles for researchers and managers to look at the factors that may affect the success of SCC.

Mediating Effect of Uncertainty Avoidance on the Relationship between Entrepreneurial Talent and SMEs Performance in Nigeria: A Conceptual Analysis

Several studies have established the relationship between entrepreneurial talent and performance. However, these studies present inconsistent findings, some found negative, positive or weak relationship. But, to date, most of these studies were conducted in developed economy as such there were few or no studies on entrepreneurial talents effect on SMEs performance in developing countries like Nigeria. The paper suggests that entrepreneurs that possess entrepreneurial talent are likely to achieve greater performance. It also argued that in contrast to high uncertainty avoidance culture where people will make sure that they have all the necessary talent requirements before starting any entrepreneurial journey, people in low uncertainty avoidance culture just storm the castle without considering whether or not they have what it takes to be entrepreneurial. Given that entrepreneurial talent is important to aspiring individuals and the economy as a whole, this paper provides propositions that will guide the future studies and provide suggestions to entrepreneurs/managers and policy makers to improve SMEs performance. It provides a conceptual analysis of moderating effect of uncertainty avoidance on the relationship between entrepreneurial talent and SMEs performance in Nigeria.

A Structural Model of the Impact of Organizational Culture on Job Satisfaction Among Secondary School Teachers

The aim of this research was to study the effect of organizational culture on job satisfaction among teachers using a structural equation modeling approach. Hofstede’s (1980) dimensions of culture (masculinity/femininity, uncertainty avoidance, collectivism/individualism, and power distance) were used to inform the theoretical framework. For this purpose, 187 secondary school teachers, 101 male and 86 female, in Education District 2 of Urmia, Iran, participated in the study and were requested to answer three questionnaires: Hofstede’s cultural dimensions questionnaire (Akour 2006), La Guardia et al.’s (2000) basic psychological needs questionnaire, and Saks’ (2006) job satisfaction questionnaire. Findings indicated that power distance and masculinity/femininity dimensions had a direct negative and meaningful effect on basic psychological needs. Furthermore, basic psychological needs had a direct positive effect on job satisfaction. Besides, the effect of uncertainty avoidance, and collectivism/individualism on basic psychological needs was not statistically significant. In short, the findings confirmed the role of organizational culture and basic psychological needs in job satisfaction.

The Role of Societal Cultural Practices in Organizational Investment in Training: A Comparative Study in 21 Countries

The role of cultural practices on the level of organizational investment in training, with the added effect of key organizational background characteristics (size and technological level), was explored. Secondary analysis was conducted on the data of project GLOBE (Global Leadership and Organizational Effectiveness) and of CRANET (Cross-Country Human Resource Management Research), covering 5,991 organizations and 21 countries. Controlled for organization size and technology level, as well as economic strength (GNI), cultural practices such as low power distance, high future orientation, and high uncertainty avoidance explained increased investment in training, supporting the study hypotheses. Organizational characteristics were also related to investment in training: Larger size and high (vs. low) technology predicted increased investment. The two organizational background characteristics interacted with national values, so the above effects of uncertainty avoidance and future orientation were higher, respectively, for larger organizations and high-tech organizations. Implications are particularly relevant for diverse organizations, which encourage the employment of a diverse workforce, and for international organizations, which tend to emphasize a global organizational culture and standard organizational practices while underestimating local cultural values.

A Comparative Study of the Effects of Low and High Uncertainty Avoidance on Continuance Behavior

This study examines the effects of uncertainty avoidance UA at the individual level on continuance behavior in the domain of mobile data services MDS. It proposes a research model for post-expectat...

The Effects of Uncertainty Avoidance on Brand Performance: Marketing Creativity, Product Innovation and the Brand Duration

This paper investigates the link between brand performance and cultural primes in high-risk, innovation-based sectors. In theory section, we propose that the level of cultural uncertainty avoidance embedded in a firm determine its marketing creativity by increasing the complexity and the broadness of a brand. It determines also the rate of firm product innovations. Marketing creativity and product innovation influence finally the firm marketing performance. Empirically, we study trademarked promotion in the Software Security Industry (SSI). Our sample consists of 87 firms that are active in SSI from 11 countries in the period 1993-2000. We use the data coming from SSI-related trademarks registered by these firms, ending up with 2,911 SSI-related trademarks and a panel of 18,213 observations. We estimate a two stage model in which first we predict the complexity and the broadness of a trademark as a measure of marketing creativity and the rate of product innovations. Among several control variables, our variable of theoretical interest is the Hofstede's uncertainty avoidance cultural index. Then, we estimate the trademark duration with a hazard model using the predicted complexity and broadness as well as the rate of product innovations, along with the same control variables. Our evidence confirms that the cultural avoidance affects the duration of the trademarks through the firm marketing creativity and product innovation.

Country Differences in the Acceptance of Compliance Goals: A US‐Mexico Comparison

The purpose of this study was to investigate the goal commitment and satisfaction of participants from two different cultures when given a compliance goal versus no goal. Using a sample of 104 Mexican and U.S. participants, we found significant differences in uncertainty avoidance but not power distance between the participants of the two cultures. In addition, uncertainty avoidance had a significant effect on both goal commitment and satisfaction regardless of the goal condition. Finally, there was a significant goal by country interaction, which shows that Mexican participants, rather than U.S. participants, were more committed and marginally more satisfied with a compliance goal than no goal. Despite differences between the cultures in uncertainty avoidance and a direct effect of uncertainty avoidance on individual reactions to goals, the interaction was not explained by uncertainty avoidance.

The effect of uncertainty avoidance on information search, planning, and purchases of international travel vacations

Academics and marketers know relatively little about how national culture affects the way people plan and spend in the $448 billion international travel and tourism economy. From a matched sample of 1042 German and Japanese visitors to the US, this research explores the relationship between the cultural dimension of uncertainty (or risk) avoidance with information search, trip planning time horizons, travel party characteristics (e.g. size of group) and trip characteristics (e.g. length of stay). Results show that consumers from national cultures characterized by higher levels of uncertainty avoidance use information sources that are related to the channel (e.g., travel agent), instead of personal, destination marketing-related, or mass media sources; they also more frequently purchase prepackaged tours, travel in larger groups, and stay on average a shorter time and visit fewer number of destinations. Contrary to expectations, they do not spend more time making the decision to travel or making their airline reservations. Implications for future research and marketing practice (e.g., segmentation and standardization) are also discussed.