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Corporate Culture


  • Gary B. Gorton

    (School of Management, Yale University, New Haven, Connecticut, USA)

  • Jillian Grennan

    (The Fuqua School of Business, Duke University, Durham, North Carolina, USA)

  • Alexander K. Zentefis

    (School of Management, Yale University, New Haven, Connecticut, USA)


Corporate culture is an omnibus term that includes many elements that are relevant to a firm, like norms, values, knowledge, and customs. Economists have made great progress recently in devising methods of measuring different aspects of corporate culture. These empirical measures of culture have explained mergers and acquisitions, corporate risk-taking, and unethical behaviors observed in corporations, among other topics. We argue that unpacking corporate culture into its components is the right way to research it empirically. Theories of corporate culture are still in development, and we discuss the major contributions thus far. We argue that a theory of the firm and of corporate decision-making that is based on corporate culture is more germane to the practical realities of firms’ inner workings than prevailing theories based on property rights and agency costs. Corporate culture has the potential to set the theoretical paradigm for all corporate finance research.

Suggested Citation

  • Gary B. Gorton & Jillian Grennan & Alexander K. Zentefis, 2022. "Corporate Culture," Annual Review of Financial Economics, Annual Reviews, vol. 14(1), pages 535-561, November.
  • Handle: RePEc:anr:refeco:v:14:y:2022:p:535-561
    DOI: 10.1146/annurev-financial-092321-124541

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    Cited by:

    1. Suss, Joel & Bholat, David & Gillespie, Alex & Reader, Tom, 2021. "Organisational culture and bank risk," Bank of England working papers 912, Bank of England.
    2. Sule Alan & Gozde Corekcioglu & Matthias Sutter, 2021. "Improving Workplace Climate in Large Corporations: A Clustered Randomized Intervention," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2021_17, Max Planck Institute for Research on Collective Goods, revised 15 Aug 2022.
    3. Vicente Cuñat & Mireia Giné & Maria Guadalupe, 2020. "Price and Probability: Decomposing the Takeover Effects of Anti‐Takeover Provisions," Journal of Finance, American Finance Association, vol. 75(5), pages 2591-2629, October.
    4. Chu-Hsuan Chang & Hsiou-Wei Lin & Wen-Hsien Tsai & Wei-Liang Wang & Cheng-Tsu Huang, 2021. "Employee Satisfaction, Corporate Social Responsibility and Financial Performance," Sustainability, MDPI, vol. 13(18), pages 1-25, September.
    5. Stulz, Rene M., 2014. "Governance, Risk Management, and Risk-Taking in Banks," Working Papers 14-09, University of Pennsylvania, Wharton School, Weiss Center.
    6. Giuseppe Danese, 2021. "Divine Kingship in the Firm: Reciprocity, Organizational Culture, and Founder Cults," Annals of the Fondazione Luigi Einaudi. An Interdisciplinary Journal of Economics, History and Political Science, Fondazione Luigi Einaudi, Torino (Italy), vol. 55(1), pages 217-236, June.
    7. René M. Stulz, 2015. "Risk-Taking and Risk Management by Banks," Journal of Applied Corporate Finance, Morgan Stanley, vol. 27(1), pages 8-18, March.

    More about this item


    corporate culture; corporate finance; corporate governance; firms; organizational behavior;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility


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