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Intra-cultural variation in individualism and credit discouragement

Author

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  • Bertrand, Jérémie
  • Febo, Valentina

Abstract

Borrower discouragement occurs when eligible firms avoid applying for credit due to anticipated rejection. Using data from the World Bank’s Enterprise Surveys and cultural measures from the World Values Survey, we show that intra-cultural variation in individualism increases discouragement, thereby advancing insights about cultural effects on economic behavior and access to credit.

Suggested Citation

  • Bertrand, Jérémie & Febo, Valentina, 2026. "Intra-cultural variation in individualism and credit discouragement," Economics Letters, Elsevier, vol. 259(C).
    • Handle: RePEc:eee:ecolet:v:259:y:2026:i:c:s0165176525006330
    DOI: 10.1016/j.econlet.2025.112796
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    References listed on IDEAS

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    3. Rosalie L Tung, 2008. "The cross-cultural research imperative: the need to balance cross-national and intra-national diversity," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(1), pages 41-46, January.
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    5. Kon, Y & Storey, D J, 2003. "A Theory of Discouraged Borrowers," Small Business Economics, Springer, vol. 21(1), pages 37-49, August.
    6. Ahern, Kenneth R. & Daminelli, Daniele & Fracassi, Cesare, 2015. "Lost in translation? The effect of cultural values on mergers around the world," Journal of Financial Economics, Elsevier, vol. 117(1), pages 165-189.
    7. Osei-Tutu, Francis & Weill, Laurent, 2023. "Individualism reduces borrower discouragement," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 370-385.
    8. Gama, Ana Paula Matias & Duarte, Fábio Dias & Esperança, José Paulo, 2017. "Why discouraged borrowers exist? An empirical (re)examination from less developed countries," Emerging Markets Review, Elsevier, vol. 33(C), pages 19-41.
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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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