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National culture and R&D investments

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  • Kyeong-Seop (KS) Choi

Abstract

By using time-collapsed data for 12,362 firms from 40 countries, I document that national culture is significantly associated with R&D investments, controlling for other determinants including a country’s financial development. In a more individualistic, less masculine, and more indulgent culture, firms tend to make more R&D investments. These findings are robust to alternative proxy variables for financial development and remain unchanged regardless of whether tested by instrumented two-stage least squares or fixed effects panel regressions. Culture’s impact is different depending on firm size and age. Further, its limited impact on equity issues suggests that it relates to R&D directly rather than being mediated by other financial market channels.

Suggested Citation

  • Kyeong-Seop (KS) Choi, 2020. "National culture and R&D investments," The European Journal of Finance, Taylor & Francis Journals, vol. 26(6), pages 500-531, April.
    • Handle: RePEc:taf:eurjfi:v:26:y:2020:i:6:p:500-531
    DOI: 10.1080/1351847X.2019.1697324
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    Citations

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    Cited by:

    1. Tamanna Dalwai & Vincenzo Scafarto & Syeeda Shafiya Mohammadi, 2025. "National culture, institutional quality and firm R&D investment: evidence from the Asia-pacific IT industry," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 15(1), pages 29-59, March.
    2. Li, Guoxing & Luo, Chengming & Chen, Sitong & Zhong, Ni, 2025. "Does foreign culture affect corporate cash holdings?," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    3. Alipour, Ali & Yaprak, Attila, 2024. "National culture and firms’ cash holdings: The role of indulgence and its boundaries," Journal of Business Research, Elsevier, vol. 172(C).
    4. Alipour, Ali & Yaprak, Attila, 2022. "Indulgence and risk-taking behavior of firms: Direct and interactive influences," Journal of International Management, Elsevier, vol. 28(2).
    5. Baoyin Qiu & Bo Cheng & Hangeng Qiu & Kam C. Chan, 2022. "Do firms with foreign residency rights controlling shareholders reduce R&D investment?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(5), pages 1403-1422, July.
    6. Zhang, Xiaoliang & Jiang, Jinjin & Liu, Zuxian & Chen, Lijun, 2025. "Cultural blueprint: Uncovering how merchant guild culture shapes corporate innovation," Finance Research Letters, Elsevier, vol. 85(PA).
    7. Kanellos S. Toudas & Jinxiu Zhu, 2023. "The Effect of Religion in European Financial Statement Disclosures: A Real Earnings’ Management Case," JRFM, MDPI, vol. 16(11), pages 1-24, October.
    8. Zhang, Xiaoliang & Wang, Qilin & Wang, Xin, 2025. "Unveiling the bright side of rice-farming culture in shaping innovation: Evidence from Chinese listed firms," The North American Journal of Economics and Finance, Elsevier, vol. 80(C).
    9. Lee, Chien-Chiang & Wang, Chih-Wei & Ho, Shan-Ju, 2022. "The dimension of green economy: Culture viewpoint," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 122-138.
    10. Yasser Eliwa & Ahmed Aboud & Ahmed Saleh, 2023. "Board gender diversity and ESG decoupling: Does religiosity matter?," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 4046-4067, November.
    11. Wang, Jianxin & Huang, Cailing & Xu, Lin & Zhang, Junhuan, 2023. "Drinking into friends: Alcohol drinking culture and CEO social connections," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 982-995.

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