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Does culture influence asset managers' views and behavior?

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  • Beckmann, Daniela
  • Menkhoff, Lukas
  • Suto, Megumi

Abstract

This research enters new ground by presenting comparative survey evidence on asset managers' views and behavior in the United States, Germany, Japan and Thailand. Relying on Hofstede's four cultural dimensions, we find that cultural differences are most helpful in understanding country differences which cannot be explained by pure economic reasoning. In short, controlling for various determinants, the dimension of more Individualism predicts less herding behavior, more Power Distance leads to older and comparatively less experienced managers in the upper hierarchy, Masculinity brings men into top positions and to higher volumes of assets under personal responsibility, and Uncertainty Avoidance is related to higher safety margins against the tracking error allowed and relatively more research effort. These consequences, i.e. the culturally different importance of herding, age, experience, gender, tracking error and research effort, clearly affect investment behavior, although in a complex way.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 67 (2008)
Issue (Month): 3-4 (September)
Pages: 624-643

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Handle: RePEc:eee:jeborg:v:67:y:2008:i:3-4:p:624-643

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Cited by:
  1. Gehrig, Thomas P. & Lütje, Torben & Menkhoff, Lukas, 2008. "Bonus Payments and Fund Managers' Behavior: Trans-Atlantic Evidence," Hannover Economic Papers (HEP) dp-411, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  2. Li, Kai & Griffin, Dale & Yue, Heng & Zhao, Longkai, 2013. "How does culture influence corporate risk-taking?," Journal of Corporate Finance, Elsevier, vol. 23(C), pages 1-22.
  3. Hoorn, André van, 2012. "Individualism and the cultural roots of management practices," Research Report 12008-GEM, University of Groningen, Research Institute SOM (Systems, Organisations and Management).

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