Corporate culture and firm value: Evidence from crisis

Yiwei Fang; Franco Fiordelisi; Iftekhar Hasan; Woon Sau Leung; Gabriel Wong

doi:10.1016/j.jbankfin.2022.106710

Journal of Banking & Finance Vol. 146 2023

Corporate culture and firm value: Evidence from crisis

Yiwei Fang¹; Franco Fiordelisi^2,3; Iftekhar Hasan⁴; Woon Sau Leung⁵; Gabriel Wong⁶

¹ Soochow University · ² University of Essex · ³ University of Rome Tor Vergata · ⁴ Fordham University · ⁵ University of Edinburgh · ⁶ Cardiff University

open access

Abstract

Based on the Competing Values Framework (CVF), we score 10-K text to measure company culture in four types (collaborative, controlling, competitive, and creative) and examine its role in firm stability. We find that firms with higher controlling culture fared significantly better during the 2008–09 crisis. Firms with stronger controlling culture experienced fewer layoffs, less negative asset growth, greater debt issuance, and increased access to credit-line facilities during the crisis. The positive effect of the controlling culture is stronger among the financially-constrained firms. Overall, the controlling culture improves firm stability through greater support from capital providers.

DOI: 10.1016/j.jbankfin.2022.106710
Volume: 146
Pages: 106710
Language: en
Sources: bibtex:phds-export.bib openalex crossref

Corporate culture and firm value: Evidence from crisis

Abstract

Cite