National Culture and Corporate Governance
65 Pages Posted: 18 Aug 2010 Last revised: 7 Jan 2011
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National Culture and Corporate Governance
Date Written: August 16, 2010
Abstract
In a series of cross-country comparisons, we show that national culture is statistically significant in differentiating countries with different corporate governance systems. Using the Schwartz cultural value model and data on corporate governance systems, we analyze the impact of national culture on six dimensions of corporate governance. Countries that have stronger emphasis on the dimensions of Embeddedness, Egalitarianism, and Harmony are more likely to have bank-based systems, while countries with a stronger emphasis on Autonomy, Hierarchy, and Mastery tend to have market-based systems. The findings suggest several implications for the ongoing debate on convergence and divergence of corporate governance systems and policy reforms regarding financial crises.
Keywords: corporate governance, national culture
JEL Classification: A13, G10, G30, N20, Z13
Suggested Citation: Suggested Citation