Impact Of National Culture Research Articles

Individualism, synchronized stock price movements, and stock market volatility

PurposeThe purpose of this paper is to examine the impact of national culture on herding behavior across international financial markets.Design/methodology/approachThe relation between national culture and investor behavior, and how it impacts overall market volatility is studied by examining synchronized stock price movements and stock market volatility in 47 countries around the world over the period of January 2003–May 2012.FindingsThe author finds that nations with lower values of individualistic culture are more likely to have a higher number of synchronized stock price movements. Further, the correlation between stock price movements apparently increases stock market volatility. Nations with high individualistic culture have a lower number of synchronized stock price movements and, thus, have lower levels of stock market volatility. The positive relationship between synchronized stock price movements and stock market volatility is stronger for emerging markets during the financial crisis from June 2007 to December 2008.Originality/valueThe empirical results in this paper indicate that a portion of the difference in market level volatility is attributed to the investor bias of different cultures. Investor behavior bias creates excess volatility that drives stock prices away from fundamentals. This impact is strong in nations with lower individualistic culture. The result from this research could also have a wide implication in the investment industry.

The impact of national culture on integrated reporting quality. A stakeholder theory approach

AbstractIntegrated reporting (IR) is a new corporate‐reporting system that aims to represent the firm's value creation in the short, medium, and long term. In contrast to other disclosure systems focusing on non‐financial dimensions, including social and environmental aspects, IR is characterized by information connectivity. In recent years, integrated reporting has received increasing interest, both academic and professional. However, report quality is still a critical aspect of IR. Although several studies investigate IR, few focus on quality and its determinants. This study aims to fill this gap by investigating the impact of national culture, an external determinant, from a stakeholder theory perspective. The results show that IR quality is related to five dimensions of Hofstede—power distance, individualism, masculinity, and indulgence negatively and uncertainty avoidance positively. This study contributes to the relevant literature by analysing an additional factor that influences the quality of corporate reports, namely, national culture. This is the first study that investigates national culture as a determinant of integrated‐reporting quality.

The impact of ICT-diffusion on government effectiveness: what role for cultural practices?

PurposeBased on data collected over a 15 year period (2000–2015) for 89 countries selected across nine geopolitical regions of the world, the purpose of this paper is to explore the role of economic development and the Hofstede index of national cultures in influencing level of government effectiveness and ICT diffusion; as well as the impact of ICT diffusion on government effectiveness. The level of economic development and a country’s ranking on the E-government index were found significant in explaining ICT diffusion and level of government effectiveness, respectively. But the findings also indicate that only the cultural factors such as Indulgence and long-term orientation (LTO) were quite significant in explaining level of government of effectiveness and ICT diffusion, respectively. The findings conclude that while some cultural factors may provide partial explanations for a country’s level of government effectiveness or ICT diffusion, but for other cultural elements, the path of influence is still unclear and at best debatable. Hence, in light of the growing emphasis placed on it in the literature, the effect of culture is limited and may have been overstated. ICT diffusion, while a necessary tool for administrative efficiency, is only but one piece of a larger puzzle and should be developed in consideration of and in the context of a broader framework of economic development, institutional design and behavioral practices.Design/methodology/approachThis study examines how existing ICT diffusion and infrastructures among a set of 89 countries spread across nine world geopolitical zones has been able to improve their government effectiveness – as measured by their relative scores or rankings on the global “government effectiveness index” over a 15 year period (2000–2015); and also how specific cultural factors may influence the level of ICT diffusion. Drawing data from the United Nations e-Government knowledge database, the United Nations Development Program, the GlobalEconomy.com, as well as other socio-demographic sources, I examine key and associated indicators that influence information technology diffusion and its contributory effects on level of government effectiveness; as well as the impact of national cultures on ICT diffusion.FindingsOverall, the finding from this analysis point to the fact that only two of the Hofstede national culture variables were significant (LTO and Indulgence). The other four national culture variables (Power Distance, Individualism, Masculinity/Femininity and Uncertainty Avoidance) were not. Indulgence has a negative effect on level of government effectiveness, while LTO has a positive effect on ICT diffusion. The other culture variables were not significant in any of the regression models, but they seem to congregate much closer to or around the mean.Originality/valueThis is the only work of its kind that has utilized the seven Hofstede indicators to test for the relationship between culture and technology over a long period of 15 years.

The impact of national culture on financial crime

PurposeDespite the existence of laws, regulations and sanctions, financial crime remains widespread. The Panama leaks have proven that people from all over the world are participating in money laundering and other financial crimes. This study aims to investigate the influence of national culture on financial crimes across 78 countries.Design/methodology/approachThis study uses Hofstede’s cultural framework as a basis for its hypotheses on financial crime. It also uses the Basel anti-money laundering index as a proxy for measuring the incidence of financial crime across the countries under review.FindingsThe findings show that countries whose cultural profiles are characterized by low uncertainty avoidance, low individualism, high masculinity and low long-term orientation have high rates of financial crime. The finding also shows that countries whose cultural profiles are characterized by individualism or positive collectivism, uncertainty avoidance and long-term orientation have low rates of financial crime.Originality/valueLaws, regulations and sanctions are not the only factors that can help deter the crime; governments should also take a holistic approach that includes the cultural factors that encourage deterrence.

Primogeniture in Turkish Family Owned Businesses: An Examination of Daughter Succession, the Impact of National Culture on Gendered Norms and Leadership Challenge

Family owned and controlled businesses, which may be owned, controlled or operated by various family members, account for an enormous percentage of global employment, revenues and GDP. Although the majority of well-known companies are family owned, research indicates that unfortunately, only thirty percent of family businesses survive to the second generation. Therefore, successful transfer of the business to the next generation is an important issue for the family business literature. However, although succession is a vital issue for Family Owned Businesses (FOBs), the process is unfortunately very gender biased in most societies, with boys being generally favoured over girls so daughters are always excluded as candidates and other women are seldom considered as successors in family businesses. In many cases, especially in certain cultures, female members of the next generation are not even perceived as a viable option. Even in today’s rapidly changing business climate, primogeniture continues to dominate the value system of family businesses. Primogeniture is an accepted approach to family business succession planning; daughters are only considered for family business succession when all descendants are female or the daughter is the first born. This study aims to identify the reasons behind the primogeniture in Turkish FOBs. The objectives of the study were to examine the key factors identified by the incumbents related with the primogeniture. In this research study, an interpretive methodology was adopted to explore, interpret and to understand meanings of knowledge. For this research, qualitative data were gathered via in-depth open-ended interviews with 20 male FOB owners who have at least one daughter and 20 daughters working at their FOB with their fathers. The questions were designed to measure different facets of FOB demographics and culture to understand their effects on the selection process within Turkish FOBs and gender norms in the context of FOB norms, which influence both family members and the business it. This study investigated daughters’ succession in FOBs in Turkey, a developing country where women are less likely than men to engage in entrepreneurial activities and show that gendered norms are still considered when choosing the successor, in other word, primogeniture still dominates the family business succession process. Keywords: Woman entrepreneurship; Primogeniture; Family Business; Gender; Culture;

Impact of National Culture on Pupils Pisa Results: The Case of European Countries

This paper aims at finding out whether the national cultural dimensions affect the quality of European education systems. The research question therefore focuses on whether and how large is the impact of national cultural dimensions on pupils' results measured by PISA results. Methodology: We used data on the national cultural dimensions from the GLOBE project and we used the PISA results for pupils' results. We did Structural Equation Model (SEM) for our empirical analysis. This model was preferred because it helped to establish the causal relationship between the cultural dimensions and pupil’s performance. Results: Our results have demonstrated that: pupils' performance are influenced by some national cultural dimensions. PISA results correlate negatively with the cultural dimension values of Uncertainty Avoidance and Future Orientation, on the other hand PISA results positively correlate with performance Orientation values and Assertiveness values. Implication: This research presents and elucidates significant cultural factors that affect pupils' results. It gives an impulse to understanding the cultural formulas that apply in the learning process.This knowledge allows for the appropriate and timely implementation of effective learning methods that have a positive impact on pupils' results.

The Stronger Impact of National Culture over Organizational Culture on Supply Chain Operations

<p>The proponents of national culture have a strong belief that national culture has an impact on the performance of a firm. They also believe that national culture influences team work and the ability to innovate. They consider the impact of national culture on behavior and relationships to be longer lasting than cultural influences that tend to diminish as a company changes. On the other hand, the supporters of organizational culture have a strong conviction that well-defined and widely used organizational practices throughout the organization will help an organization become excellent and capable of achieving high levels of performance. Both the partisans of organizational culture and the supporters of national culture have their own reasons as to why each side is more impactful when compared to the other. This paper attempts to answer which side has a stronger impact by reviewing the literature on the effect of national culture or organizational culture on the supply chain operations of MNCs in Japan and the US. It appears that national culture is more impactful than organizational culture when it comes to supply chain operations.</p><p><strong>BAHASA INDONESIA ABSTRAK:</strong> Para pendukung budaya nasional memiliki keyakinan kuat bahwa budaya nasional berdampak pada kinerja perusahaan, mereka juga percaya bahwa budaya nasional mempengaruhi kerja tim, kemampuan untuk berinovasi dan mereka mempertimbangkan dampak budaya nasional terhadap perilaku, hubungan yang berkelanjutan setidaknya itu akan bertahan lebih lama dibandingkan dengan pengaruh budaya organisasi yang cenderung berkurang seiring perubahan perusahaan. Di sisi lain, para pendukung budaya organisasi memiliki keyakinan yang kuat bahwa melalui praktik organisasi yang didefinisikan dengan baik dan banyak digunakan di seluruh organisasi akan membantu organisasi untuk menjadi organisasi yang sangat baik yang mampu mencapai kinerja organisasi yang sangat baik. Baik pendukung budaya organisasi maupun pendukung budaya nasional memiliki alasan sendiri mengapa masing-masing pihak lebih berdampak dibandingkan dengan pihak lain. Makalah ini mencoba untuk menjawab sisi mana yang memang memiliki dampak yang lebih kuat dengan meninjau beberapa literatur tentang pengaruh budaya nasional atau budaya organisasi pada operasi rantai pasokan MNC di Jepang dan AS. Tampaknya budaya nasional lebih berdampak dibandingkan dengan budaya organisasi ketika datang ke operasi rantai pasokan.</p>

Cross-country differences in new service development

PurposeThe purpose of this paper is to test how national culture may help to explain cross-country differences in new service development (NSD) by comparing the impact of NSD success factors between Mexico and Sweden.Design/methodology/approachEight hypotheses based on prior literature on NSD and national culture were tested using covariance-based structural equation modeling and survey data from 210 Mexican and 173 Swedish firms.FindingsLaunch proficiency and customer interaction had a positive impact on NSD performance with no difference between the two cultures. NSD process formalization did not have clear positive impact on NSD performance but had a statistically significantly stronger impact in the structured culture (Mexico). Team empowerment affected NSD performance positively, but the difference between cultures was non-significant.Research limitations/implicationsThe impact of national culture depends on the type of NSD success factor. Some factors are unaffected by the cultural context, while factors congruent with the national culture enhance performance. Factors incongruent with national culture may even hurt NSD performance.Practical implicationsWhen choosing priorities in NSD improvement, managers need to consider the national culture environment.Originality/valuePaper directly tests how national culture moderates NSD performance using primary data. Findings suggest that the effects of NSD success factors are contingent on congruence with national culture.

Culture, business environment and SMEs' profitability: Evidence from European Countries

This paper aims to examine whether and how, certain country-specific characteristics shape the profitability of SMEs. Using a large sample of around 40,000 firms operating in 25 EU countries over the period 2006–2014 we find that freedom from corruption, a better environment in terms of the conditions that could contribute to the ease of getting credit, and fewer government regulation related to the starting, operating, and closing a business, enhance profitability. The dimensions of national culture also play an important role. Our results show that individualism, masculinity, and long-term orientation have a positive impact on profitability, whereas power distance and uncertainty avoidance have the opposite effect. We also find that the magnitude of the impact of national culture on profitability depends on political stability and institutional quality.

The impact of national culture on corporate adoption of environmental management practices and their effectiveness

National culture matters in business as it affects managerial attitudes, values, behaviors, and efficacy in organizations. It contributes to our understanding of environmental management issues as well. Previous studies investigating the link between national culture and environmental performance had mixed findings as they overlooked the intervening mechanism between the two—firm environmental management practice (EMP) adoption. This paper considers the missing link, lays out a complete theoretical framework, and empirically tests the effects of national culture on firm EMP adoption and EMP effectiveness. The analysis uses data collected during the 5th round of the Global Manufacturing Research Group (GMRG) survey, Hofstede cultural dimensions, and World Bank Database. Hierarchical linear models (HLMs) using the Bayesian Markov chain Monte Carlo (MCMC) approach are employed to examine the cross-level relationships in the framework. The study finds out that certain cultural traits are significantly related to corporate EMP adoption and how effectively EMPs are implemented after adoption. The study provides meanings insights into the role of national culture in the context of environmental management.

The moderating effects of corporate and national factors on lean projects barriers: a cross‐national study

Despite companies’ efforts to develop lean thinking in their industrial context, the implementation of many lean projects has not been consistently successful, often resulting in delay, failure, abandonment or rejection. Whereas some authors emphasised that company characteristics, like the product demand profile, are significant factors in lean projects, other studies analysed the impact of national culture. This paper aims to study the combined effect of various factors related to national culture and company characteristics of lean implementation barriers in order to determine whether the environmental context in which the company operation can affect the outcome of lean project implementation. A survey has been conducted to collect information about companies of various sizes (small–medium–large) in all industry fields. Data from companies, including manufacturing firms, in 23 different countries, were analysed in depth by a combination of Association Rules and Network Analysis. The results show that some national culture dimensions, such as Performance Orientation and Gender Egalitarianism, influence lean management success and help to maintain a lean culture. Maintaining a lean culture is even more critical than developing it. Furthermore, if the implementation of lean practices is an arduous task for large organisations, it becomes even greater for SMEs. Other cultural factors of individuals such as Uncertainty Avoidance, Future Orientation and Institutional Collectivism also help to support a lean culture and overcome human and cultural barriers.

Effectiveness of bonus and penalty incentive contracts in supply chain exchanges: Does national culture matter?

In this study, we investigate the impact of national culture on the effectiveness of bonus and penalty incentive contracts in supply chain exchanges. We conducted laboratory experiments in Canada, China, and South Korea, involving transactional exchanges in which suppliers were presented with either bonus or penalty contracts. Then we compared suppliers’ contract acceptance, level of effort, and shirking across national cultures. Our findings reveal critical cultural influences on contract effectiveness. We show that although acceptance of bonus contracts is comparable across cultures, suppliers from Canada, a national culture considered low in power distance and high in humane orientation, exhibit lower acceptance rates of penalty contracts. In addition, we find evidence that suppliers associated with collectivist cultures exert more effort and shirk less in bonus contracts but these relationships also are more complex. When we compare contract effectiveness across bonus and penalty contracts within a given cultural setting, we find in all three countries greater acceptance of bonus contracts than penalty contracts. Also, after contracts are accepted, bonus contracts are more successful in China because suppliers exert greater effort and shirk less under bonus contracts than penalty contracts. However, in Canada and South Korea, the results of accepted contracts for both penalty and bonus contracts are nearly indistinguishable.

Cultural Corruption: Lessons from the Petrobras Scandal Case

The confounding aspects of corrupt behavior and cultural idiosyncrasies have long been portraited in fiction and on anecdotal evidences of unethical business transactions. Indigenous practices in emerging countries have been particularly targeted for the ambiguity around their ethicality. This article aims to understand the impact of national cultures’ characteristics on corruption cases, and more specifically the role of indigenous practices on such matters. The analysis of two regression models of Hofstede’s national cultures dimensions on the Corruption Perception Index are presented, followed by a single-case study of the biggest corruption scandal ever seen, involving Brazilian company Petrobras. National and international media perceptions around the link between the case and the country’s indigenous practice, i.e. the Brazilian jeitinho, are rhetorically assessed through the attributional coding technique. The unfolding of the case is expected to generate insights as to the significance of indigenous practices to ethical management.

The impact of national culture on the adoption of environmental management standards

ISO 14001 is widely seen as the most popular Environmental Management Standard. Its diffusion around the world, however, is taking place at different speeds across countries. In this article we exp...

The role of national culture in shaping health workforce collaboration: Lessons learned from a case study on attitudes to interprofessional education in Malta

The World Health Organisation identifies interprofessional education (IPE) as a key element for preparing a collaborative workforce. However, global implementation remains challenging due to individual, professional and organisational barriers. A qualitative case study explored the concept of introducing an undergraduate IPE programme at the Faculty of Health Sciences, University of Malta. A combination of in-depth interviews and focus groups were conducted with a sample of sixty-four academics,health and education policy makers and newly qualified health professionals. The findings suggest that while participants support the notion of IPE, they identify multiple barriers that would challenge implementation. This includes particular cultural norms and values which participants perceived would conflict with IPE. These findings were interpreted through Hofstede’s theory of cultural dimensions as a means of theorising about the role that culture could play in implementing such an approach. This study contributes to the health policy debate by highlighting the potential impact of national culture in the planning, development and delivery of collaborative initiatives. It also highlights new insights for European small states and other countries by providing a lens through which culture needs to be taken into account in the transfer of innovation across health systems.

The impact of national culture on TQM implementation in the Libyan banks

The main purpose of this study is to explore the impact of national culture on TQM implementation in the Libyan banks. Hofstede’s dimensions were used to achieve this aim. Total of (600) questionnaire was distributed to general managers, managers of Middle management and supervisors in the Libyan banks; (455) were useable. The results showed that the level of the implementation of TQM was low in Libyan banks. The results also revealed that the individualism dimension had a positive impact and that the dimensions power distance and masculinity had a negative impact on all the TQM implementation factors in the Libyan banks. Furthermore, the study showed that there were no significant relationships between the dimensions of uncertainty avoidance and long-term orientation and TQM implementation factors in the Libyan banking environment. This study, it is the first exploratory study to have assessed and investigated the influence of national cultural dimensions on TQM implementation in Libya. In addition, the study also provided some recommendations that might help them to improve services quality level and performance in the Libyan banks.

Impact of national culture on innovation activities of companies: a case of Germany, Austria, Switzerland and the Czech Republic

Impact of national culture on innovation activities of companies: a case of Germany, Austria, Switzerland and the Czech Republic

Understanding the Impact of the Cultural Factors on Hospital Information System Acceptance: A Literature Review and Proposal of a New Model

The behavioural intention to accept information system technologies remains an interesting research field for information system management specialists and researchers. However, the cultural dimension has rarely been treated by researchers in the healthcare context. This paper focuses on identifying the impact of national culture on users’ intention to accept the Hospital Information System in public healthcare establishments in Morocco. Thus, we propose a research model which is based on a strong literature review, taking into consideration the previous studies’ recommendations and limitations. The proposed model was developed through the extension of the Technology Acceptance Model (TAM) (Davis, 1989), by Hofstede’s cultural dimensions.

Influence of national culture on IPO activity

We study the impact of national culture on initial public offerings (IPOs) - an important entrepreneurial activity through examining and providing empirical evidence of the proclivity for entrepreneurial firms situated across cultural contexts to seek legitimacy through floating IPOs. Informal institutions like culturally embedded societal norms of entrepreneurial behaviors and expectations for retained earnings as well as societal preferences for discretionary free cash flows are presented as the legitimizing mechanisms for such actions. We examined 7654 IPOs that occurred between 2003 and 2012 (312 country-year observations) from 47 countries. The results showed that countries with high power distance, high collectivism, and long-term orientation were positively associated with higher levels of IPO activity. In addition, the IPO activity levels were found to be significantly lower when the aggregated Euclidean distance differences between individual country culture profiles (where all the six dimensions of Hofstede's national culture taxonomy were considered together) and the ideal country cultural profile were greater.

The Impact of National Culture on Sustainability Reporting: A Cross Country Analysis

This study investigates the influence of culture on governance, social and environmental sustainability across 59 countries. Hofstede's culture dimensions have been used as a measure of culture, RobecoSAM sustainability measure is used as a proxy for governance, social and environmental sustainability reporting. The results reveal the countries that are characterized by high power distance, masculinity, low individualism and long-term orientation are supposed to be less interested in sustainability reporting. To increase the sustainability reporting, it is essential for the government and decision-makers to give more focus to the culture as an important driver of sustainability.