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Article
Publication date: 20 July 2021

Fouad Jamaani

This paper uniquely aims to triangulate the effects of the COVID-19 pandemic, government financial intervention (GFI) policies and power distance (PD) culture on returns…

Abstract

Purpose

This paper uniquely aims to triangulate the effects of the COVID-19 pandemic, government financial intervention (GFI) policies and power distance (PD) culture on returns of equity indices during the COVID-19 epidemic in the world's equity markets.

Design/methodology/approach

The research employs panel data regression analysis using 1,937 observations from 19 developed and 42 developing countries. The data employed contain daily registered COVID-19 cases, global equity market index prices, financial intervention policies introduced by governments and Hofstede's cultural dimension measure of PD.

Findings

The authors find that investors certainly react negatively to the number of confirmed COVID-19 cases reported, that GFI policies indeed reinforce investors' expectations of policymakers' dedication to stabilize the economy during the COVID-19 pandemic and that equity investors in high PD cultures overreact to GFI news, resulting in more positive stock returns. The authors discover a difference between developed and developing countries in terms of the effect of GFI policies and PD on equity returns.

Research limitations/implications

Results suggest that investors react negatively to the daily registered COVID-19 cases. The authors find that financial intervention policies introduced by governments reinforce investors' outlooks of policymakers' commitment to stabilize local stock markets during the coronavirus pandemic. The results confirm that equity market investors in PD cultures overreact to financial intervention news, thus resulting in more positive stock returns.

Practical implications

The paper provides three original contributions. First, it helps us to understand the single effect of the COVID-19 and financial intervention policies introduced by governments on returns of the global equity market. Second, it examines the possibility of a two-way joint effect between the COVID-19 and financial intervention policies introduced by governments and the COVID-19 and differences in countries characterized by a PD culture concerning stock market returns. Third, it investigates the possibility of a three-way interaction effect between the COVID-19 contagion, financial intervention policies introduced by governments and culture on returns of equity markets.

Originality/value

The authors' findings are valuable to researchers, investors and policymakers. Culture and finance scholars can now observe the role of Brown et al.'s (1988) uncertain-information hypothesis with reference to the effect of the COVID-19 and financial interventions policies introduced by governments on returns of equity markets. This is because the authors' findings underline that since investors' uncertainty declines with daily registered numbers of COVID-19 cases, the introduction of GFI policies function as a neutralizing device to re-establish investors' expectations to equilibrium. Consequently, stock market returns follow a random walk that is free from the negative effect of the COVID-19. The authors' work is likely to advise equity investors and portfolio managers about the extent to which major exogenous economic events such the outbreak of global diseases, financial interventions policies introduced by governments and differences in countries' PD culture can individually and jointly influence the return of the world's equity markets. Investors and portfolio managers can employ the authors' results as a guideline to adjust their investment strategy based on their investment decision strategy during global pandemics. Policymakers aiming to introduce financial intervention policies to stabilize their stock market returns during global pandemics can benefit from our results. They can observe the full effect of such policies during the current COVID-19, and subsequently be better prepared to choose the most effective form of financial intervention policies when the next pandemic strikes, hopefully never.

Details

Cross Cultural & Strategic Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2059-5794

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Article
Publication date: 6 August 2020

Ali Kutan, Usama Laique, Fiza Qureshi, Ijaz Ur Rehman and Faisal Shahzad

The extant literature provides substantial evidence that various facets of national culture play a significant role in corporate financial decision making. We…

Abstract

Purpose

The extant literature provides substantial evidence that various facets of national culture play a significant role in corporate financial decision making. We systematically review the role of national culture on the various thematic domains of corporate financial decision making to outline what have been studies thus far and what needs to be studied.

Design/methodology/approach

Keywords such as national culture, organizational culture, power distance, uncertainty avoidance, masculinity, risk aversion and individualism for a search in the prominent academic literature databases are used. The studies related to the corporate financial decision making that is tied with these keywords are identified and selected for the systematic review.

Findings

The review of extant literature suggests strong evidence that national culture has a significant role in influencing corporate cash holding, corporate risk-taking, individual behaviour of the financial managers and initial public offering by the corporations. The review also indicates, although extant studies have examined the role of national culture in the key corporate financial decisions, evidence on the role of national culture in the firm's investment efficiency aspects is rather scarce. Also, what explains the role of national culture in corporate financial decision making has not been empirically exploited through causal mechanisms.

Practical implications

The findings of the studies help advance our understanding of the current research status concerning the role played by the national culture in shaping corporate financial decisions and raise important future calls.

Originality/value

To best of our knowledge, no prior study has systematically reviewed the role of national culture in the thematic domains of corporate financial decision making.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 14 May 2019

John Holland

Corporate financial communications concern public and private disclosure (Holland, 2005). This paper aims to explain how banks developed financial communications and how…

Abstract

Purpose

Corporate financial communications concern public and private disclosure (Holland, 2005). This paper aims to explain how banks developed financial communications and how problems emerged in the global financial crisis. It explores policy responses.

Design/methodology/approach

Bank cases reveal construction and destruction of the social, knowledge and economic world of financial communications over two periods.

Findings

In the 1990s, learning about financial communications by a “dominant coalition” (Cyert, March, 1963) in bank top management was stimulated by gradual change. The management learnt how to accumulate social and cultural capital and developed “habitus” for disclosure (Bourdieu, 1986). From 2000, rapid change and secrecy factors accelerated bank internalisation of shareholder wealth maximising values, turning “habitus” in “market for information” (MFI) (Barker, 1998) into a “psychic prison” (Morgan,1986), creating riskier bank cultures (Schein, 2004) and constraining learning.

Research limitations/implications

The paper introduces sociological concepts to banking research and financial disclosures to increase the understanding about financial information and bank culture and about how regulation can avoid crises. Limitations reflect the small number of banks and range of qualitative data.

Practical implications

Regulators will have to make visible the change processes, new contexts and knowledge and connections to bank risk and performance through improved regulator action and bank public disclosure.

Social Implications

“Masking” and rituals (Andon and Free, 2012) restricted bank disclosure and weakened governance and market pressures on banks. These factors mediated bank failure and survival in 2008, as “psychic prisons” “fell apart”. Bank and MFI agents experienced a “cosmology episode” (Weick, 1988). Financial communications structures failed but were reconstructed by regulators.

Originality/value

The paper shows how citizens require transparency and contested accountability to democratise finance capitalism. Otherwise, problems will recur.

Details

Qualitative Research in Financial Markets, vol. 11 no. 1
Type: Research Article
ISSN: 1755-4179

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Book part
Publication date: 8 September 2017

Sherif El-Halaby, Khaled Hussainey and Abdullah Al-Maghzom

The authors measure the impact of culture on Sharia; Social and Financial Disclosure (SSFD) of Islamic Banks (IBs) around the world.Content analysis is used to measure…

Abstract

The authors measure the impact of culture on Sharia; Social and Financial Disclosure (SSFD) of Islamic Banks (IBs) around the world.

Content analysis is used to measure levels of disclosure for a sample of 136 IBs of 25 countries for years 2013 and 2014. Different cultural measures are used. These include secrecy/transparency as suggested by Gray (1988) and Hofstede (1980, 1983, 2001, 2010)’s culture dimensions which include: Power Distance; Individualism; Masculinity; Uncertainty Avoidance; Long-Term Ordination and Indulgence. Ordinary least square (OLS) regression is used to test the research hypotheses.

After controlling bank-specific, corporate governance and country characteristics, the authors found that Hofstede’s culture dimensions have a significant impact on SSFD. They also found that Gray's transparency dimension positively influence levels of sharia, social and aggregated disclosure. Therefore, they conclude that culture influences levels of disclosure in IBs.

This study has policy implications for managers and regulators of Islamic banking industry.

This study is the first to use both Gray and Hofstede models in the context of IBs around the world. It also the first to explore the impact of culture on three different disclosure levels for IBs.

Details

Advances in Accounting Behavioral Research
Type: Book
ISBN: 978-1-78714-527-6

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Book part
Publication date: 9 October 2020

Ellie Chapple, Kathleen Walsh and Yun Shen

Abstract

Details

Corporate Fraud Exposed
Type: Book
ISBN: 978-1-78973-418-8

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Book part
Publication date: 16 September 2014

Alexander Parkinson

The purpose of this paper is to offer theoretical and methodological guidance for ethnographers of finance and financialization. It critiques the notion of…

Abstract

Purpose

The purpose of this paper is to offer theoretical and methodological guidance for ethnographers of finance and financialization. It critiques the notion of financialization as a macro process and argues for more in-depth ethnographic studies of professional financial actors.

Design/methodology/approach

The author analyzes existing ethnographies of financial “elites” and “non-elites” and draws on his years of employment at two contrasting British retail stockbroking firms. The concepts of “identity” and “self” are used to analyze the ways in which professional financial actors are shaped by their activities and working cultures.

Findings

The processes through which financial actors are constructed and the consequent ways in which they come to understand their professional selves are influenced by a variety of dynamics: occupational and organizational cultures and practices, the nature of the work itself, technological development, and social interactions with colleagues.

Research limitations/implications

The paper demonstrates the situated nature of financial action and suggests that future research grapples with these dimensions.

Originality/value

The application of an ethnographic perspective to British retail stockbroking and the method of “ethnographic reflection” evoked to achieve this are new contributions. The broad analysis of ethnographies of finance through the lens of identity offers a fresh view of the literature. The paper may be of interest to those wishing to study stockbrokers, financial actors, and financial organizations, as well as those in the social sciences, more generally, who are interested in the micro-dynamics of organizations, financialization, and capital circulation.

Details

Production, Consumption, Business and the Economy: Structural Ideals and Moral Realities
Type: Book
ISBN: 978-1-78441-055-1

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Book part
Publication date: 19 August 2017

Mikel Larreina and Leire Gartzia

In the last decades, many of the most talented and promising young graduates in the developed economies have joined the financial industry. Simultaneously, ill-designed…

Abstract

In the last decades, many of the most talented and promising young graduates in the developed economies have joined the financial industry. Simultaneously, ill-designed incentives’ schemes have favored the development of a culture in which excessive greed, free-riders’ behavior, unreasonable appetite for risk, and short-term decision making have endangered the economy and, potentially, have laid the foundations for financial, economic, social, and environmental crises.

In this chapter, we review current challenges in the financial industry from the lens of human and social capital. We examine some of the factors that allowed unethical behavior and a short-term financial focus in the financial sector, examining how compensation and an extremely competitive culture became key elements that favored greedy and manipulative behavior and ultimately generated socially harmful human and social capital in the financial sector. Finally, we discuss the emergence of a number of game-changers (namely, Brexit, FinTech, the growing relevance of ethical standards, and the increasing participation of women and millennials in the industry) that might represent potential promotors of change and help restructure and reshape the financial industry.

Details

Human Capital and Assets in the Networked World
Type: Book
ISBN: 978-1-78714-828-4

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Article
Publication date: 31 October 2018

Amoako Kwarteng and Felix Aveh

The study aims to empirically examine the impact of organizational culture on accounting information system and corporate performance of firms in Ghana.

Abstract

Purpose

The study aims to empirically examine the impact of organizational culture on accounting information system and corporate performance of firms in Ghana.

Design/methodology/approach

A survey was conducted using top corporate executives of diverse firms from different industrial sectors. The data were analyzed using structural equation modeling (SEM) and a further post hoc test was done using analysis of variance (ANOVA).

Findings

The study demonstrates that there is a statistically significant relationship between organizational culture on accounting information system and corporate performance. The results indicate that mission, adaptability and consistency dimensions of organizational culture were significant and also accounting information system influences corporate performance. Moreover, there are significant differences in the means of accounting information system on different industrial sectors.

Research limitations/implications

The study is limited to the extent that only overall profitability was used to measure performance. In addition, the study did not control for leadership style and organizational structure in the relationships. The implication of the study is that ethical culture-shaped accounting information system and financial reporting practice which ultimately leads to corporate performance.

Originality/value

Ghana is a developing country where structures and institutions are not well developed. Businesses and organizational forms are now beginning to pick up; therefore, organizational culture, accounting information systems and their impact on corporate performance are not well documented. These are all new phenomena in this part of the globe. The context of Ghana in terms of national culture that feeds into organizational culture, institutions, quality and application of accounting information is entirely different from that of advanced countries. The study therefore contributes to the extant literature by applying the constructs of organizational culture, accounting information system and corporate performance within a developing country perspective.

Details

Meditari Accountancy Research, vol. 26 no. 4
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 2 March 2012

Tiago Melo

The purpose of the paper is to examine the influence of organizational culture, top management tenure and financial performance on corporate social performance (CSP).

Abstract

Purpose

The purpose of the paper is to examine the influence of organizational culture, top management tenure and financial performance on corporate social performance (CSP).

Design/methodology/approach

The sample comprises 295 Fortune 500 American companies from 2000 to 2005. Financial information from Thompson World Scope is contrasted with social responsibility data from KLD database and the estimation technique applied is panel data.

Findings

Results indicate that a humanistic culture has a positive impact of CSP, as well as management tenure and slack resources in a lesser degree.

Research limitations/implications

The paper successfully constructs and employs a variable depicting the humanistic culture of a firm. More research is needed to define which factors determine this culture dimension, so it can be scientifically agreed on as opposed to being used exploratorily.

Practical implications

The results point out that firms that incorporate a humanistic approach to culture perform well in CSP because their internal cultural values and beliefs drive them to establish a good relationship with stakeholders.

Originality/value

As opposed to the majority of the studies that focus on the CSP leading to financial performance relation, this article alternatively analyzes factors that determine CSP.

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Article
Publication date: 24 August 2020

Sanjaya Singh Gaur, Sivakumari Supramaniam, Sheau Fen Yap and Mele Foliaki

This paper aims to understand the attitudes of young Pacific Island adults towards financial products such as debt and money and explore the cultural elements influencing…

Abstract

Purpose

This paper aims to understand the attitudes of young Pacific Island adults towards financial products such as debt and money and explore the cultural elements influencing the financial consumption amongst Pacific Island adults.

Design/methodology/approach

Hermeneutic phenomenology has been used to explore and gain insights into the experiences, thought processes, values and aspirations of young Pacific Island adults with regard to their consumption of financial products.

Findings

The findings identify culture as an influential factor in shaping the participants’ attitudes and financial consumption behaviour. Culture not only enabled the individuals to internalize their values, norms and beliefs but also shaped their way of thinking through the effect of communications.

Originality/value

Communication element within culture is identified as an influential factor in shaping the participants’ attitudes and financial consumption behaviour offering an important insight that social marketers should be aware of and be prepared to address when developing their financial educational programs or any other behavioural change interventions.

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