How pervasive is the effect of culture on stock market linkages? Evidence across regions and economic cycles

Singh, Vikkram; Li, Bin; Roca, Eduardo

doi:10.1080/00036846.2017.1279268

Cited by 20 publications

(16 citation statements)

References 70 publications

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“…According to this statistical result, hypotheses 1B and C are accepted. This is supported by Singh, Li, & Roca (2017), who pointed out that culture can have an important role in shaping investors' choices regarding investments in the financial market. This is demonstrated in Table 3.…”

Section: Hypotheses Testsmentioning

confidence: 84%

The Impact of Social Knowledge on the Efficiency of the Financial Markets: A Case Study on the Erbil Stock Exchange

Nanakali

Agha

Othman

2021

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This study was designed to investigate the factors that can have an impact on the efficiency of financial markets, and the Erbil Stock Exchange was chosen as a case study. The researchers sought to evaluate the level of social knowledge by concentrating on certain dimensions which have a direct influence on the public’s perspective regarding financial markets – namely religion, culture and economic awareness – and the number of people participating in the sale and purchase of stocks and shares. This study tested the hypotheses by applying some statistical analyses, and the outputs are detailed in the tables, figures and factors. According to the results, the efficiency of the stock market is affected by monthly income, culture and religion, and public experience. It was also found that there is no difference in perspective between men and women regarding investing in the stock market. This is supported by the hypothesis test results, which indicated that there is no correlation between gender and economic awareness, number of participators, culture, and religion. The results of the factor analyses show that there is a significant correlation between religion, culture, economic awareness and the number of people participating and social knowledge, and that these factors significantly affect the efficiency of the stock market.

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Section: Hypotheses Testsmentioning

confidence: 84%

The Impact of Social Knowledge on the Efficiency of the Financial Markets: A Case Study on the Erbil Stock Exchange

Nanakali

Agha

Othman

2021

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“…In recent years, with the introduction of the national cultural dimension theory [7], an increasing number of scholars have begun to explore the significant factors of national culture or explain such behavioral bias phenomenon. National culture, as a soft non-institutional force, has a subtle impact on financial decision-making by affecting individual financial behaviors, habits, preferences, and choices, which is confirmed by a large number of empirical studies [8][9][10][11][12][13].…”

Section: Introductionmentioning

confidence: 82%

Uncertainty avoidance and investment underdiversification

Tang

Zhou

2022

PLoS ONE

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The relationship between the cultural dimension of uncertainty avoidance and investment underdiversification is examined. A theoretical link between uncertainty avoidance and ambiguity is established, that is, cultural uncertainty avoidance captures the aversion attitude towards ambiguity at the national group level, thus, cultural dimension of uncertainty avoidance influences investors’ behavioral biases of home bias and the investment abroad concentration. The empirical results show that investment underdiversification is significantly and positively affected by the degree of uncertainty avoidance and robustness tests support this conclusion. A further analysis reveals that uncertainty avoidance moderates the effects of ambiguity on investment underdiversification, whereas the effects of uncertainty avoidance are mediated by the status quo bias.

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“…There is a consensus that culture, defined by Hofstede as the "software of the mind" has a significant impact on the way markets move together. As an example other authors (Aggarwal et al, 2010;Galariotis & Karagiannis, 2021;Singh et al, 2017) agree that culture and more especially cultural distance along with geographical distance using gravity models play a role in determining stock market correlation. Social trust has been lagging in this manner and our goal in this study is to use trust distance as a proxy to measure how it affects stock market co-movement.…”

Section: Social Trust and Stock Market Comovementmentioning

confidence: 99%

The Effect of Trust and Trade on Stock Markets Comovement

Matlhaku¹,

Khan²

2021

FMIR

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Trust is a basic component of social trust that has been neglected in existing empirical literature regarding stock markets comovements. It is an important factor due to its implications for portfolio management and financial system stability. This study investigates how trust distance affects the way stock markets co-move together in ASEAN, BRICS, and G12 countries. Further, we investigate the moderating effect of trust distance on trade between different nations and the comovement of their stock markets. This is because trade is an important factor when it comes to stock market integration. Our findings based on the OLS and quantile regression demonstrate that similarity in trust positively affects the way stock markets move together, however, this is not always the case during market turmoils because of increased volatility. For the quantile regression we discovered that trust distance has an asymmetric effect to stock markets co-movement as it is only significant below the 60th percentile only. Moreover, we find that trust positively moderates the effect of trade on stock markets’ co-movement between BRICS and G12 nations as it increases openness to trade which in turn leads to synchronizing business cycles and equity markets. This however is not the case with ASEAN nations as they are still nascent markets and not yet mature. The policy implications for stakeholders imply that invetors need to diversify their portfolios to markets which are furthest in trust distance above 1 and that policymakers like central banks need to put in place regulations which consider trust distance in order to avoid financial contagion during market turmoils.

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How pervasive is the effect of culture on stock market linkages? Evidence across regions and economic cycles

Cited by 20 publications

References 70 publications

The Impact of Social Knowledge on the Efficiency of the Financial Markets: A Case Study on the Erbil Stock Exchange

The Impact of Social Knowledge on the Efficiency of the Financial Markets: A Case Study on the Erbil Stock Exchange

Uncertainty avoidance and investment underdiversification

The Effect of Trust and Trade on Stock Markets Comovement

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