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National culture and central bank transparency: Cross-country evidence

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  • Makrychoriti, Panagiota
  • Pasiouras, Fotios

Abstract

Central banking has been traditionally characterized by mystique and an organizational culture of secrecy. While in recent years there has been a shift towards greater transparency in response to a public demand for higher accountability of independent central banks, the degree of transparency continues to vary across countries. The present study examines whether and how the differences in central bank transparency can be explained by a national culture of secretiveness. Using a large cross-country sample of central banks from around the globe we document a negative association between central bank transparency and a societal culture of secrecy. This finding is robust to the controls for various country-specific attributes, and the use of instrumental regressions to lessen concerns about endogeneity.

Suggested Citation

  • Makrychoriti, Panagiota & Pasiouras, Fotios, 2021. "National culture and central bank transparency: Cross-country evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 72(C).
    • Handle: RePEc:eee:intfin:v:72:y:2021:i:c:s1042443121000378
    DOI: 10.1016/j.intfin.2021.101318
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    6. Kotkowski, Radoslaw, 2023. "National culture and the demand for physical money during the first year of the COVID-19 pandemic," Finance Research Letters, Elsevier, vol. 51(C).
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    8. Wang, Kun Tracy & Liu, Simeng & Wu, Yue, 2021. "Corporate social activities and stock price crash risk in the banking industry: International evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 74(C).
    9. Ashraf, Badar Nadeem & El Ghoul, Sadok & Goodell, John W. & Guedhami, Omrane, 2022. "What does COVID-19 teach us about the role of national culture? Evidence from social distancing restrictions," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 80(C).
    10. Machokoto, Michael, 2024. "The impact of cultural orientation towards secrecy on innovation," Economics Letters, Elsevier, vol. 234(C).
    11. Fregidou-Malama, Maria & Hyder, Akmal S., 2024. "Constructing organizational culture in an international subsidiary: Elekta healthcare services in Greece," International Business Review, Elsevier, vol. 33(4).
    12. Olayinka Oyekola & Samuel Odewunmi, 2023. "The consequence of societal secrecy for financial constraints," Discussion Papers 2303, University of Exeter, Department of Economics.
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    More about this item

    Keywords

    Central banking; Culture; Transparency;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values

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