Publication Type

Journal Article

Version

Preprint

Publication Date

5-2014

Abstract

Using an international sample of banks and country-level indices for individualism and uncertainty avoidance as proxies for national culture, we study how differences in culture across countries affect accounting conservatism and bank risk-taking. Consistent with expectations, our cross-country analysis indicates that individualism is negatively (positively) related to conservatism (risk-taking) and uncertainty avoidance is positively (negatively) related to conservatism (risk-taking). We also find that cultures that encourage higher risk-taking experienced more bank failures and bank troubles during the recent financial crisis.

Keywords

national culture, accounting conservatism, risk-taking, individualism, uncertainty avoidance, banking

Discipline

Accounting | Finance and Financial Management

Research Areas

Corporate Governance, Auditing and Risk Management

Publication

Accounting Review

Volume

89

Issue

3

First Page

1115

Last Page

1149

ISSN

0001-4826

Identifier

10.2308/accr-50682

Publisher

American Accounting Association

Copyright Owner and License

Authors

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

http://doi.org/10.2308/accr-50682

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