The Effect of National Culture On Banks’ Bankruptcy Risk: An International Study

Subject Areas : Financial Knowledge of Securities Analysis

Behnam Koohestani ¹ , بهمن بنی مهد ^{2 *}

1 - MA student, Department of Accounting, Karaj Branch, Islamic Azad University, Karaj, Iran
2 - Associate Professor, Department of Accounting, Karaj Branch, Islamic Azad University, Karaj, Iran. (Corresponding Author)

Received: 2023-08-20 Accepted : 2023-10-29 Published : 2025-01-25

Keywords: Cultural Values, Hofstede Studies, Bankruptcy Risk, Banks, National Culture,

Abstract :

The purpose of this article is the comparative analysis of bank bankruptcy from the aspect of cultural values of societies, and in other words, the effects of different aspects of national culture on the risk of bank bankruptcy. This study was conducted on an international sample of banks from 111 countries in the world, whose cultural characteristics and bankruptcy risk data were collected between 2009 and 2022, and correlation and regression techniques were used to analyze the data and test the research hypotheses. took The findings of the current research indicate that at the 95% confidence level of the statistical test, the cultural components of individualism, masculinity, avoidance of uncertainty and long-term vision have a significant relationship with the risk of bank bankruptcy. Meanwhile, no significant relationship was observed between the cultural component of power distance and the risk of bank bankruptcy. Also, individualism and masculinity are positively related to bankruptcy risk, and uncertainty avoidance and long-term perspective are negatively related to it. The evidence of this article can provide useful information for the legislators and policy makers in the field of banking about the effects of culture on the risk of bank failure.