Kashefi-Pour, E, Amini, S orcid.org/0000-0003-2719-8267, Uddin, M orcid.org/0000-0003-1035-0365 et al. (1 more author) (2020) Does Cultural Difference Affect Investment–Cash Flow Sensitivity? Evidence from OECD Countries. British Journal of Management, 31 (3). pp. 636-658. ISSN 1045-3172
Abstract
We investigate the influence of national culture on corporate investment–cash flow sensitivity. We conjecture that national culture shapes managerial perceptions of information asymmetry and agency problems, thus impacting the investment–cash flow relationship. We document empirical evidence in support of our claim. By linking the investment–cash flow sensitivity to cultural differences, our findings show that, while collectivism has an attenuating influence, uncertainty avoidance, power distance and masculinity have a reinforcing effect on the relationship between cash flow and investment. Our results hold for a sample of 205,268 firm‐years across 24 OECD countries between 1990 and 2017, and are robust after accounting for alternative statistical approaches, sample compositions and measures of cultural dimensions, along with controls for institutional and governmental factors. In addition, by decomposing cash flow into uses and sources of funds in a dynamic multi‐equation model, where firms make financing and investment decisions jointly subject to the constraint that sources must equal uses of cash, we find that national culture shapes how firms react to changes in cash flow.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2020 British Academy of Management. This is the peer reviewed version of the following article: Kashefi‐Pour, E., Amini, S., Uddin, M. and Duxbury, D. (2020), Does Cultural Difference Affect Investment–Cash Flow Sensitivity? Evidence from OECD Countries. Brit J Manage. , which has been published in final form at https://doi.org/10.1111/1467-8551.12394. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 10 Jan 2020 09:45 |
Last Modified: | 28 Feb 2022 01:38 |
Status: | Published |
Publisher: | Wiley |
Identification Number: | 10.1111/1467-8551.12394 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:155465 |