Uncertainty Avoidance Cultures Research Articles

Unleashing Innovation Under Sanctions: The Catalyst of National Culture

ABSTRACTThis article explores how national culture moderates the impact of economic sanctions on a targeted country's innovation performance, using a dynamic difference‐in‐difference approach. Our empirical analysis utilises a panel dataset spanning 213 nations from 2013 to 2019. We discover that economic sanctions generally have a detrimental effect on the innovation performance of targeted countries. However, not all types of sanctions have the same negative impact on innovation. Specifically, financial, arms, and travel sanctions exhibit this negative influence. Furthermore, we reveal that under the sanction circumstances, countries characterised by high power distance and high uncertainty avoidance cultures tend to experience a higher level of innovation performance. Our findings remain robust after conducting various tests. In our subsequent analyses, we focus on different types of sanctions and find that the favourable impact of power distance and uncertainty avoidance culture on the relationship between sanctions and innovation applies primarily to financial sanctions.

Media Literacy Interventions Improve Resilience to Misinformation: A Meta-Analytic Investigation of Overall Effect and Moderating Factors

The widespread dissemination of misinformation has become a global concern. A recommended solution is to improve people’s ability to discern true from false information through appropriate media literacy education programs. This meta-analysis quantitatively synthesized the results of 49 experimental studies ( N = 81,155) that examined the efficacy of media literacy interventions in mitigating misinformation. This study finds that media literacy interventions generally improve resilience to misinformation ( d = 0.60). Specifically, the interventions reduce belief in misinformation ( d = 0.27), improve misinformation discernment ( d = 0.76), and decrease misinformation sharing ( d = 1.04). Moreover, media literacy interventions have stronger effects (1) when multiple sessions rather than a single session are implemented, (2) in high (vs. low) uncertainty avoidance cultures, and (3) among college students than among adults recruited from online crowdsourcing platforms (e.g., Amazon Mechanical Turk). These findings enrich our understanding of inoculation theory and provide valuable guidance for the design of future media literacy intervention programs.

Examining national culture and journalistic autonomy

This study used data from 52 countries to examine newspaper journalists’ perceptions of their professional autonomy and whether autonomy is improving. Results suggest that nearly three-quarters of newspaper journalists enjoy some degree of professional autonomy. Journalists in individualistic cultures and high uncertainty avoidance cultures reported higher levels of autonomy. A healthy democracy also predicted journalistic autonomy. Overall, results suggest journalistic freedom is declining. Interestingly, stronger human development was associated with perceived declines in autonomy.

Economic policy uncertainty and corporate cash holdings: the moderating role of country-level of corruption and uncertainty avoidance

ABSTRACT This paper investigates the relationship between economic policy uncertainty and corporate cash holdings using data from seven emerging countries for the 2010–2018 period. Empirical results show that firms tend to hold more cash when EPU is high. Moreover, this positive relationship is stronger in countries with better control of corruption and in high uncertainty avoidance cultures. Results are robust to different measures of cash holdings and EPU.

Country risk, global uncertainty, and firms’ cash holdings: Do the role of law, culture, and financial market development matter?

To the extent of our knowledge, there is a gap in scrutinizing the impacts of the country's risk and global uncertainty on Asian firms' cash holdings. Therefore, this work aims to shed light on this gap by choosing 989 listed non-financial Asian firms and performing both the static (fixed-effects) and dynamic (Difference-GMM and System‐GMM) panel data methods between 2008 and 2020. The findings reveal that an increase in a country's risk and global uncertainty stimulates firms to stockpile more cash though the impact of country risk is more pronounced. Likewise, the results underscore that among the country risk factors, firms have more precautionary motives to stockpile more cash with increases in financial and political instability while they hold more cash with rises in economic stability. Remarkably, the results emphasize that the impacts of country risk and global uncertainty on cash holdings are more prominent in environments characterized by common-law legal origin, high uncertainty avoidance cultures, and less financial market development. Moreover, the results reveal that firm-specific factors including growth opportunity, leverage, profitability, dividend, and size have an important role in shaping Asian firms' cash holdings policy.

Age of Executives, Uncertainty Avoidance Culture and Corporate Social Responsibility Disclosure

Age of Executives, Uncertainty Avoidance Culture and Corporate Social Responsibility Disclosure

When commitment isn’t enough: The cross-cultural interactive effects of commitment-inducement and compliance-enforcement on performance

The current study contributes to the ongoing discourse in the extant literature concerning the performance effects of the commitment-inducement and the compliance-enforcement approaches to the management of people and work. We expand on two research studies conducted in China to assess if the finding that commitment-inducement and compliance-enforcement result in higher organization financial and operational performance generalizes to corporate social responsibility performance and to countries and cultures across the globe. Using the current study’s large global multi-source sample, our findings illuminate that compliance-enforcement explained significant incremental variance in both organization financial and operational performance and organization corporate social responsibility performance beyond that of the commitment-inducement approach alone. Moreover, the highest levels of both performance outcomes were obtained by organizations that simultaneously used both commitment-inducement and compliance-enforcement; that is, hybrid governance. Compliance-enforcement was also found to have a more substantive relative effect on organization financial and operational performance while commitment-inducement was found to have a more substantive relative effect on organization corporate social responsibility performance. Furthermore, as hypothesized, at the between country-level, the relationship between the commitment-inducement approach of managing people and work and corporate social responsibility performance was found to be more negative both for a high individualism than a low individualism culture and for a high uncertainty avoidance than a low uncertainty avoidance culture, respectively. Whereas, the relationship between the compliance-enforcement approach and corporate social responsibility performance was found to be more positive for a high uncertainty avoidance than a low uncertainty avoidance culture. Finally, as hypothesized, at the between country-level, commitment-inducement and compliance-enforcement were found to be substitutes and have a negative synergistic effect on corporate social responsibility performance. Implications, limitations, and avenues for future research are discussed.

CEO overconfidence and firm performance: A meta-analytic review and future research agenda

Abstract We provide a meta-analytic examination of the CEO overconfidence–firm performance relationship. Our results support a positive relationship between these focal variables. Drawing from trait activation theory and national cultural differences literatures, we find that cross-cultural effects moderate the focal relationship. More specifically, we find that the CEO overconfidence–firm performance relationship is stronger in high assertive, low institutional collectivistic, low in-group collectivistic, high future-oriented, high gender egalitarian, high performance-oriented, low power distance, and low uncertainty avoidance cultures. Consistent with the resource orchestration literature, we also find that entrepreneurial orientation mediates the focal relationship between CEO overconfidence and firm performance. Taken together, our results present a more nuanced picture of the CEO trait–firm performance relationship. In the future, researchers may consider examining additional CEO traits as well as additional contextual factors including internal, as well as environmental, factors.

Cultural diversity of the corporate board and stock price informativeness

This study aims to investigate the impact of the cultural diversity of the corporate board on stock price Informativeness. The study provides empirical evidence from Pakistan stock exchange. We examine how cultural dimensions (individualism, masculinity, power distance, and uncertainty avoidance) affect stock Informativeness. Most of the previous studies analyzed culture from an investor’s perspective, but in this study, the cultural dimensions of a corporate board are being explored. The study employs the GMM (generalized method of moment) for empirical analysis because this method eliminates the endogeneity concerns. The study considers the companies from Pakistan stock exchange’s KSE 100 index from 2009 to 2019. The cultural diversity of the board is computed after analyzing 6451 directors from 43 different countries. The results show that the corporate board's cultural diversity has significant and positive impact on stock price informativeness. Furthermore, the boards having members from high power distance and masculine cultures are negatively associated with stock price informativeness, while the individualistic and uncertainty avoidance cultures are positively linked with stock price informativeness. In conclusion, we suggests that regulators should encourage board diversity as it helps companies and corporate boards in eliminating information asymmetries and consequently enhancing the stock price informativeness. Increase in stock infromativenss helps investors in making better investment decisions.

“Cultural inventories”: How dimensions of national culture moderate the effect of demand unpredictability on firm-level inventories

While national culture has been recognized as an important driver of business decisions, our understanding of its effects on firm-level inventories is limited. In this paper, we argue that the national culture dimensions of uncertainty avoidance and long-term orientation influence biases and behaviors that affect how managers make inventory decisions in light of demand unpredictability. These dimensions of national culture thereby explain variations in the strength of the demand unpredictability-inventory relationship at the firm level. Using a dataset of 9127 firm-year observations from 25 countries and 20 manufacturing industries between 2006 and 2019, we find that the positive effect of demand unpredictability on inventories is augmented in high uncertainty avoidance cultures and weakened in long-term oriented cultures. These results are consistent with the notion that demand unpredictability is differentially interpreted across national cultures, thus explaining variations in firms’ inventory levels beyond what can be predicted by traditional inventory theory models. Implications for future research and managerial practice are discussed.

Do national culture and economic freedom affect bank risk-taking behavior? Evidence from GCC countries

PurposeThe global financial crisis of 2008 has put greater doubt on the bank risk-management effectiveness around the world. As a part of the response to such doubt, the Gulf Cooperation Council (GCC) region is formulating some feasible approaches to manage bank risk. In this regard, an understanding of the role of the region’s culture and economic freedom will provide immense input into this risk management approach. This study examines the impact of national culture and economic freedom on bank risk-taking behavior.Design/methodology/approachData on bank risk measures, culture and economic freedom are obtained from the FitchConnect, World Bank database, Hofstede’s insights and Heritage Foundation. Generalized least squares and two step-system generalized method of moments are then used to examine the risk-taking behavior of the region.FindingsBanks of the GCC region operating in the low power distance, high collectivism, masculine and low uncertainty avoidance cultures are susceptible to assuming more operational and insolvency risks. Furthermore, banks’ overall risk-taking inclination is positively increased once the region has considerable business and monetary freedom.Practical implicationsThe governments and bank regulatory bodies may benefit from the study findings by developing the best economic freedom index and national culture that enriches risk management practices and curves excessive risk-taking inclination.Originality/valueTo the best of the authors’ knowledge, this study is the first attempt to address the interplay among culture, economic freedom and bank risk to ensure constructive risk-taking behavior for the GCC banking industry.

Trust antecedents in online reviews across national cultures

When reading an online review, consumers rely on implied trust-building factors within it. Trust antecedents have been extensively researched and categorized into argument quality and source credibility. However, there is still a need to investigate how their help for consumers differs across national cultures. Furthermore, while a profile photo has been found to enhance the helpfulness of a review by improving source credibility, little is known about how consumers perceive user appearance in a review picture and no research has compared these two types of visual information. To bridge these gaps, we examine how trust antecedents and visual information help consumers' decision making differently across national cultures, using reviews collected from Amazon in the US and Germany, respectively. Our results show that information quality is more helpful for consumers in an individualistic and low uncertainty avoidance culture, whereas source credibility is more valued in the opposite culture. Interestingly, the effects of the two types of visual information, user appearance in a profile photo versus in a review picture, also differ across cultures. This research contributes to the online review literature by introducing visual information and national culture with new perspectives of trust. Our findings suggest that multinational e-commerce businesses adopt culture-specific strategies in review systems to better help consumers make informed purchase decisions.

Two large-scale global studies on COVID-19 vaccine hesitancy over time: Culture, uncertainty avoidance, and vaccine side-effect concerns.

This article presents one of the largest and broadest investigations into COVID-19 vaccine hesitancy, a burning issue that poses a global threat. First, I provide a timely review of the predictors of COVID-19 vaccine hesitancy identified by prior studies. More importantly, I advance a dynamic, cultural psychological perspective to examine how the cultural dimension of uncertainty avoidance partly explains national differences in initial vaccine hesitancy. To track global vaccine hesitancy over time, I leveraged a daily survey of 979,971 individuals in 67 countries/territories (October 2020 to March 2021) and another daily survey of over 11 million individuals in 244 countries/territories (December 2020 to March 2021). To increase sample representativeness, both surveys used algorithms to correct for nonresponse bias and coverage bias. Consistent with my theoretical perspective, people in higher (vs. lower) uncertainty avoidance cultures had higher vaccine hesitancy initially (late 2020) as a function of greater vaccine side-effect concerns, but these differences decreased over time as COVID-19 vaccine uptake became prevalent. These findings were robust after controlling for other cultural dimensions, demographics, COVID-19 severity, government response stringency, socioeconomic indicators, common vaccine coverage, and religiosity. Understanding cultural differences in vaccine hesitancy is important, as delaying vaccination for even a short period can increase morbidity and mortality. (PsycInfo Database Record (c) 2023 APA, all rights reserved).

Macro Uncertainty Impacts on ESG Performance and Carbon Emission Reduction Targets

This study examines the impact of three macro uncertainty factors: economic policy uncertainty (EPU), political instability (PIS), and cultural uncertainty avoidance (UA), on corporate environmental, social and governance (ESG) performance and carbon emission reduction targets. Additionally, we examine whether these macro factors are affected by the profitability of the company. Using an unbalanced sample of companies located in the USA, China, and the UK during the period 2013–2020, results show that during times of economic uncertainty, companies are more likely to engage in ESG activities, including establishing emission reduction targets. Companies in countries with lower levels of political stability (PS) exhibit greater levels of social and environmental engagements, and companies operating in societies that tolerate risks, including the risk associated with climate change, are more likely to have better ESG performance and be committed to emission reduction targets. The results also suggest that profitable companies are more likely to deal with uncertain environments successfully, as they have the required resources to invest in ESG. The study suggests several practical implications for managers and policymakers.

An Investigation of the Moderating Effects of National Culture Values on the Interaction Between Job Insecurity and Employability on Employee Outcomes

This study investigated the combined effects of national culture and perceptions of employability on relationships between job insecurity and work and non-work outcomes for individual employees. Data from 28,674 participants in 35 nations were obtained from the 2015 European Working Conditions Survey. Results showed that nation-level differences in individualism/collectivism (I/C), uncertainty avoidance (UA), and masculinity/femininity (M/F) accounted for variation in the degree to which perceptions of employability buffered the negative effects of job insecurity on job satisfaction, work engagement, and subjective well-being. Among more collectivist cultures, employability did less to minimize the effects of job insecurity on job satisfaction than in more individualistic cultures. Employability also had a weaker effect on buffering the consequences of job insecurity for job satisfaction and work engagement when cultural uncertainty avoidance was higher. And across all three outcome measures, higher levels of job insecurity combined with lower perceptions of employability were consistently more detrimental to individuals in more masculine cultures. Results support the prevailing theory regarding the mechanisms underlying the effects of job insecurity on individuals and suggest several important practical implications for managing a global workforce.

Effects of message delivery on cross-cultural biosecurity compliance: Insights from experimental simulations.

Effective biosecurity communication of transmission risks and associated protective behaviors can reduce the impacts of infectious diseases in US animal agriculture. Yet, more than 1/5 of animal production workers speak a language other than English at home, and more than 40 percent are less than fluent in English. Communicating with these workers often involves translating into their primary languages. However, communication strategies targeting different cultural groups are not well-understood. To identify cross-linguistic risk communication strategies to facilitate compliance, we hypothesized that uncertainty avoidance cultures associated with the languages might affect biosecurity compliance contingent upon two additional covariates: (1) the risk of acquiring an infection and (2) the delivery method of the infection risk. We designed an experimental game simulating a line of separation (LOS) biosecurity tactic in a swine production facility, where participants were tasked with completing tasks inside and outside of the facility. Data were collected using games in the two most spoken languages in the US: English (EN) and Spanish (SP). Participants made binary decisions about whether to use the LOS biosecurity tactic based on the risk information provided. Mixed-effect logistic models were used to test the effects of covariates on using the LOS tactic by different language groups. We found that biosecurity compliance rates of participants who took the experiments in the language associated with high and low uncertainty cultures showed no significant differences. However, there are substantial differences in how risk information is perceived between the two language groups under different infection risks. Specifically, and counterintuitively, SP participants were more risk-averse in gain scenarios but more risk-taking in loss scenarios. These differences are most pronounced in numeric risk messaging, indicating that numbers may not be the best way to communicate risk information regarding biosecurity cross-culturally. When confronted with situational biosecurity decisions, risk perception and preferences vary by language group. Effective biosecurity communication needs to account for these differences and not assume that direct translation of risk messages will result in comparable compliance.

Employment protection and corporate risk-taking

This paper examines how employment protection laws affect corporate risk-taking. Using a sample of 19,335 firms from 27 OECD countries over the period 2002–2018, we find that strong employment protection legislation reduces corporate risk-taking. Moreover, the effect of employment protection legislation on corporate risk-taking is stronger in countries of high uncertainty avoidance culture and weaker in countries of high power distance culture.

E-commerce in high uncertainty avoidance cultures: The driving forces of repurchase and word-of-mouth intentions

This study proposes and empirically tests a contextualized model for investigating repurchase intentions of e-commerce consumers as well as their word-of-mouth (WOM) intentions in high uncertainty avoidance cultures and based on a synthesis of the S–O-R paradigm and Information Processing Theory (IPT). Data for the study were collected from 560 Jordanian online customers and analysed using structural equation modelling (PLS-SEM). The findings demonstrated that the dimensions of policy service quality including cash-on-delivery (COD) payment options and return policy leniency, positively influenced customer trust. In addition, electronic logistics service quality (LSQ) dimensions positively impacted customer satisfaction. Furthermore, it was found that satisfaction of online consumers is a major driver of their trust, repurchase, and WOM intentions. While customer trust was revealed as a key enabler of repurchase intention, its effect on WOM was insignificant. The findings provide useful implications for both practice and future research.

The Role of National Institutions in Shaping Economic Outcomes of CSR Communication

This paper examines if the financial outcomes of corporate sustainability communication are conditional on institutional factors. The article first constructs a theoretical framework explaining how regulatory and socio-cultural factors of a firm's home country moderate the effect of corporate sustainability communication on financial performance. The paper then tests the theoretical predictions with the data of 621 multinational enterprises (MNEs) headquartered in 31 countries from 2012-2018, using the general method of moments (GMM) and two-stage least square instrumental variable (2SLS IV). The paper finds significant strengthening effects of auditing and accounting standards, corporate ethical culture, uncertainty avoidance culture but significant weakening effects of press freedom, power distance, individualism, and masculinity, along with insignificant impact of long-term orientation and indulgence culture of a firm's home country on the relation between corporate sustainability communication and financial performance. The paper provides significant implications for literature, public policy and management of MNEs, offering a practical framework for MNEs to consider when designing their corporate sustainability communication strategy in different institutional contexts.

When do product crises hurt business? A meta-analytic investigation of negative publicity on consumer responses

This meta-analysis synthesizes 30 years of empirical work examining the impact of product crises on consumer evaluations. Prior research suggests that a product crisis will negatively affect consumer responses to that product. Extending this stream of research, we show that the magnitude of negative information effects is dependent on characteristics of the crisis, the product, and target consumers. Specifically, the deleterious effects of product crises are more pronounced when threat severity is high, the product failure is performance-related, consumer health is at issue, the product is directly involved in the incident, and the crisis occurs in a high power distance or high uncertainty avoidance cultures. We discuss theoretical contributions and practical implications of these findings for both marketing scholars and brand managers.