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Do National Cultures Impact Mortgage and Financial Well-Being Levels? Evidence from Europe

Author

Listed:
  • Rashed Isam Ashqar

    (None)

  • Júlio Lobão

    (None)

  • Mihaela Onofrei
  • Bogdan-Narcis Firtescu
  • Paula-Andreea Terinte

Abstract

This study explores the influence of national culture on mortgage and financial well-being levels in the European context. The paper employs regression analysis using mainly Hofstede's cultural dimensions and the EU-SILC dataset from Eurostat to provide a better understanding of the determinants of the decision to hold secured debts and a better explanation of the states of financial well-being. To the best of our knowledge, no study has addressed the influence of culture on mortgage and financial well-being levels in the European setting using samples from different countries and controlling for household characteristics. We conclude that power distance, masculinity, uncertainty avoidance, and long-term orientation are negatively associated with the likelihood of holding a mortgage. The results also show that masculinity, uncertainty avoidance, long-term orientation, and indulgence are negatively associated with the amount of mortgage. Moreover, individualism and long-term orientation (power distance and uncertainty avoidance) are positively (negatively) associated with being in a state of financial well-being. Collectively, our research shows that national cultures play a crucial role in household finance. JEL Codes - D10; G40; G51

Suggested Citation

  • Rashed Isam Ashqar & Júlio Lobão & Mihaela Onofrei & Bogdan-Narcis Firtescu & Paula-Andreea Terinte, 2021. "Do National Cultures Impact Mortgage and Financial Well-Being Levels? Evidence from Europe," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 68(3), pages 263-284, September.
    • Handle: RePEc:aic:saebjn:v:68:y:2021:i:3:p:263-284:n:220
    DOI: 10.47743/saeb-2021-0021
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    More about this item

    Keywords

    Culture; Hofstede dimensions; Mortgage; Financial well-being; Europe; corporate governance; financial reporting; bank profitability;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

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