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National culture and private benefits of control

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  • Salzmann, Astrid
  • Soypak, Kalender

Abstract

Our paper examines the relationship between national culture and private benefits of control. We concentrate on the Hofstede dimensions and analyze their role for a range of instruments that directly relate to the private benefits of control. In this sense, our proxies reflect how power is distributed among shareholders indicating the potential a given shareholder has to extract private benefits. In a cross-country analysis of 36 countries, we show that power distance relates positively to the expropriation of private benefits of control, whereas individualism exhibits a negative relationship. Our results are statistically significant and robust to several alternative specifications.

Suggested Citation

  • Salzmann, Astrid & Soypak, Kalender, 2017. "National culture and private benefits of control," Finance Research Letters, Elsevier, vol. 20(C), pages 199-206.
    • Handle: RePEc:eee:finlet:v:20:y:2017:i:c:p:199-206
    DOI: 10.1016/j.frl.2016.09.027
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    Cited by:

    1. María Consuelo Pucheta‐Martínez & Isabel Gallego‐Álvarez, 2024. "Firm innovation as a business strategy of CEO power: Does national culture matter?," Business Strategy and the Environment, Wiley Blackwell, vol. 33(3), pages 1865-1886, March.
    2. Breuer, Wolfgang & Knetsch, Andreas, 2022. "Informal authority and economic outcomes of family firms: An issue of national power distance," International Review of Financial Analysis, Elsevier, vol. 81(C).

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    More about this item

    Keywords

    Private benefits of control; National culture;

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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