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Alcohol culture and corporate risk-taking

Author

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  • Guo, Lan
  • Su, Zhong-qin
  • Xiao, Zuoping
  • Fung, Hung-Gay

Abstract

Using data on Chinese firms from 2004 to 2019, this study reveals a positive association between alcohol culture and corporate risk-taking. The positive relationship is robust across different measures of risk-taking, estimation methods, and after considering potential sample selection and endogeneity issues. Two mechanisms emerge behind this positive relationship: social networks and trustful social environments; these mediating variables explain corporate risk-taking well. In addition, stronger formal institutions (market development, government efficiency, and the legal environment) and religion weaken the positive effects of alcohol culture on risk-taking. Meanwhile, these positive effects are positively moderated by collectivism and language diversity. Finally, influenced by alcohol culture, CEOs play an essential role in risk-taking.

Suggested Citation

  • Guo, Lan & Su, Zhong-qin & Xiao, Zuoping & Fung, Hung-Gay, 2024. "Alcohol culture and corporate risk-taking," Research in International Business and Finance, Elsevier, vol. 67(PB).
    • Handle: RePEc:eee:riibaf:v:67:y:2024:i:pb:s0275531923002532
    DOI: 10.1016/j.ribaf.2023.102127
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    More about this item

    Keywords

    Alcohol culture; Risk-taking; Social network; Trust environment;
    All these keywords.

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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