Journal of Corporate Finance Vol. 41 2016
The gravity of culture for finance
Abstract
Scholarship in finance has paid relatively little attention to the role of culture in financial decision-making compared to other business disciplines and economics. This paper will review what research has been done to date including a critical assessment of the key databases used to measure differences in cultural values. Notwithstanding the concerns with the measures of cultural values, I conduct an empirical analysis of the role of cultural distance for explaining the foreign bias in international portfolio holdings using traditional gravity models in international economics. I affirm the statistical explanatory power of culture for these investment biases and outline several new potential directions for research.
- DOI
- 10.1016/j.jcorpfin.2016.07.003
- Volume
- 41
- Pages
- 610-625
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref