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Does political risk affect corporate culture?

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  • Zhao, Gang
  • Xu, Shengyan
  • Sun, Li

Abstract

Using a sample encompassing 52,707 firm-year observations for the period of 2002–2021, we investigate the influence of political risk on culture at the company level. Our analysis reveals a significant and positive relation between company-level political risk and corporate culture, indicating that public companies facing heightened political risk tend to exhibit a more robust corporate culture. This evidence highlights the significance of a strong corporate culture in bolstering firm performance and reducing the adverse effects of political uncertainty. Furthermore, our research indicates that the positive link between company-level political risk and corporate culture is amplified for companies with weaker earnings performance.

Suggested Citation

  • Zhao, Gang & Xu, Shengyan & Sun, Li, 2025. "Does political risk affect corporate culture?," Research in International Business and Finance, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:riibaf:v:78:y:2025:i:c:s0275531925002442
    DOI: 10.1016/j.ribaf.2025.102988
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