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How Does National Culture Affect Corporate Investment Efficiency?

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  • Quoc Trung Tran
  • Quoc Dat Tran

Abstract

Corporate investment efficiency may be determined by changes in overinvestment and/or underinvestment. Prior studies showed that national culture dimensions affect firm investment efficiency. However, they failed to address whether overinvestment or underinvestment is the effective mechanism to transmit these effects. With a research data of 280,092 year-firms from 44 countries, we find that national culture affects corporate investment efficiency through underinvestment. Individualism and masculinity are positively related to investment efficiency while uncertainty avoidance and power distance are negatively related to investment efficiency.

Suggested Citation

  • Quoc Trung Tran & Quoc Dat Tran, 2026. "How Does National Culture Affect Corporate Investment Efficiency?," Global Business Review, International Management Institute, vol. 27(4), pages 956-973, August.
    • Handle: RePEc:sae:globus:v:27:y:2026:i:4:p:956-973
    DOI: 10.1177/09721509221088898
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