Influence of National Culture on Accounting Conservatism and Risk Taking in the Banking Industry

By Kiridaran Kanagaretnam, C. Lim, Gerald J. Lobo. 2014

303 citations recorded by the source corpus.

ABSTRACT: Using an international sample of banks and country-level indices for individualism and uncertainty avoidance as proxies for national culture, we study how differences in culture across countries affect accounting conservatism and bank risk-taking. Consistent with expectations, our cross-country analysis indicates that individualism is negatively (positively) related to conservatism (risk-taking) and uncertainty avoidance is positively (negatively) related to conservatism (risk-taking). We also find that cultures that encourage higher risk-taking experienced more bank failures and bank troubles during the recent financial crisis. Data Availability: Data are available from the sources identified in the text.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/23ba1e02a7679659246e2ba9d4743d45403e9693

Citations in the corpus

• National culture and bank risk-taking (2017, unknown): “In particular, we follow Kanagaretnam et al. (2014) and use the Hofstede individualism and uncertainty avoidance values.”