Culture and capital structure: What else to the puzzle?

Mogha, Vipin; Williams, Bruce A.

doi:10.1016/j.irfa.2020.101614

Cited by 20 publications

(10 citation statements)

References 40 publications

(157 reference statements)

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“…Secondly, this paper contributes to the literature on the role of a firm’s behavioural aspects in corporate environmental performance. National cultural dimensions have a significant impact on economic decisions, such as corporate dividend policy (Chang et al , 2020), risk-taking practices (Gaganis et al , 2019) and capital structure (Mogha and Williams, 2021). Prior studies also extend the interdisciplinary research effort to understand how national cultural dimensions affect the firms’ climate change risk management practices (Disli et al , 2016; Masini and Menichetti, 2012).…”

Section: Introductionmentioning

confidence: 99%

National culture and firm-level carbon emissions: a global perspective

Rahman

Kabir²,

Talukdar³

et al. 2023

SAMPJ

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Purpose This study aims to examine the association between national culture and corporate carbon emissions. Specifically, the research explores how firm-level carbon emissions are associated with Hofstede’s four cultural dimensions: power distance, individualism/collectivism, masculinity/femininity and uncertainty avoidance. Design/methodology/approach The study examines 36,945 firm-year observations across 39 countries and uses panel regressions to assess the association between firm-level carbon emissions and national culture. This research also uses instrumental variable regression to address the potential endogeneity issues. Alternative proxies for culture are used to test the sensitivity of the findings. Findings The findings of this study reveal that power distance and uncertainty avoidance are negatively while individualism and masculinity are positively associated with corporate carbon emissions. The results are robust to the instrumental regressions and alternative measures of culture. Practical implications For policymakers, this research highlights the importance of national culture in assessing the efficacy of potential emissions reduction policies, identifying the possible challenges posed by the cultural differences of the targeted groups and designing policy adjustments accordingly. The local culture in which the branches of multinational corporations operate should be considered when the management implements emissions reduction policies for the business units in diverse cultural settings. Social implications Aligning emissions reduction policies with regional cultural dimensions has the potential to enhance the effectiveness of corporate and national emissions reduction policies, which can contribute to mitigating global climate change adversities. Originality/value This study provides insights into firm-level carbon emissions and Hofstede’s four cultural dimensions in a global setting.

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Section: Introductionmentioning

confidence: 99%

National culture and firm-level carbon emissions: a global perspective

Rahman

Kabir²,

Talukdar³

et al. 2023

SAMPJ

View full text Add to dashboard Cite

show abstract

“…The capital structure puzzle has been addressed from both financial (Barclay and Smith, 2020) and non-financial theories (Araki and Martins, 2021; Mogha and Williams, 2021) but still remains as a major challenge that has been poorly explained (Deangelo, 2022; Denis, 2012; Graham and Leary, 2011). Based on strategic and entrepreneurial theories and the context of DETEs, this study investigates another missing piece of the capital structure puzzle namely pressures from formal and informal institutions.…”

Section: Resultsmentioning

confidence: 99%

Bank ties, institutional pressures, and capital structure of Vietnamese SMEs

Ngo

Nguyen

Roy

2022

IJEBR

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PurposeThis article studies the moderating effect of institutional pressures on the impact of bank ties on the capital structure of small and medium-size enterprises (SMEs).Design/methodology/approachThe study uses an unbalanced longitudinal dataset covering three years—2011, 2013 and 2015—from a project on small manufacturing enterprises in Vietnam. The sample consists of 7,680 firm-year observations.FindingsPressures from formal and informal institutions lessen the positive effect of bank ties on the capital structure of SMEs. These moderating effects are more salient in regions having lower institutional quality.Originality/valueEmpirically showing how institutional factors can be investigated together with relational factors to explain the capital structure of SMEs in a developing economy. Distinguishing between formal and informal institutional pressures and revealing their indirect effect on SMEs' capital structure through impacting the effect of bank ties.

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“…In terms of duration, the debt acquired by organizations can be both short-term and long-term (Mogha & Williams, 2020). Organizations can have several types of debt in their capital structure at the same time and do not necessarily have to choose only one type, as some organizations do not have access to all types of capital, thus limiting their choices (Orlova et al, 2020).…”

Section: Financial Indebtedness Of Organizationsmentioning

confidence: 99%

The influence of CEO narcissistic personality traits on the indebtedness of B3 companies

Oliveira,

Garcia

2024

Rev. contab. finanç.

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The objective of this article is to investigate the influence of CEO narcissistic personality traits on the indebtedness of Brazilian non-financial companies listed on the B3. Other research on narcissistic traits has focused on their impact on the profitability of organizations. Thus, this study aims to fill the gap in understanding the impact of CEO narcissistic traits on companies' debt decisions and their determinants by including a psychological characteristic. This research is relevant because it helps academics, business professionals and policymakers to identify patterns and trends that could warn of possible financial crises. The impact of this article is related to the evidence on the effects of hiring narcissistic CEOs on indebtedness, since understanding the interaction between the CEO's profile and the company's financial decisions can provide practical guidelines for risk management and informed decision making, thus contributing to the field of business strategy and corporate finance. A sample of 299 non-financial companies was analyzed from 2011 to 2020, using data from the Economática database, annual reports, integrated reports, sustainability reports and management reports. Two proxies were used to measure narcissistic personality traits, based on the CEO's signature and the prominence of his or her photo. Indebtedness was measured by the following indicators: onerous, total, short-term and long-term debt. The results show that the greater the narcissistic traits of the CEOs, the greater the indebtedness of the organizations. This contributes to a deeper understanding of the factors that influence companies' financial decisions, since identifying the factors that lead to risky debt decisions can enable the implementation of preventive measures and more effective risk management strategies.

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Culture and capital structure: What else to the puzzle?

Cited by 20 publications

References 40 publications

National culture and firm-level carbon emissions: a global perspective

National culture and firm-level carbon emissions: a global perspective

Bank ties, institutional pressures, and capital structure of Vietnamese SMEs

The influence of CEO narcissistic personality traits on the indebtedness of B3 companies

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