Company, Governance or Cultural Dimensions, Is there any difference in factors affecting capital decisions in Asia and Europe? (Cultural Finance)

Abstract

This study examined the relation of three dimensions of the capital structure (company specific factors, corporate governance and cultural dimensions). We found a significant effect of five cultural dimensions of Hofstede , 1) Individualism vs. collectivism (IND), 2) Uncertainty avoidance (UNCA) and 3) Masculinity vs. femininity (MAS) on capital structure in the presence of company specific elements i.e. liquidity, profitability, tangibility, growth and firm size along with corporate governance variables such as board size , CEO duality, presence of independent directors, number of female directors and presence or absence of foreign directors. For this paper, secondary data of listed companies from 8 countries was collected through DataStream database for the period of (2006 to 2016). Furthermore, data was analyzed through Panel EGLS and GMM and results are summarized.