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National culture of secrecy and stock price synchronicity: Cross-country evidence

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  • Gaganis, Chrysovalantis
  • Leledakis, George
  • Pasiouras, Fotios
  • Pyrgiotakis, Emmanouil

Abstract

Stock price synchronicity has been associated with various market outcomes like the return-sentiment relations, stock liquidity, and asset pricing models. Therefore, researchers have devoted a lot of time in revealing the underlying factors that drive stock price synchronicity. Using a sample of 49 countries over the period 1990 to 2019 we find a robust association between higher cultural secretiveness and stock price synchronicity. Our results suggest that a deep-rooted country characteristic like the culture of secrecy can diminish the information environment of stock markets. The results are robust to the use of various control variables suggested in earlier studies and alternative regression techniques, including ones that address endogeneity concerns.

Suggested Citation

  • Gaganis, Chrysovalantis & Leledakis, George & Pasiouras, Fotios & Pyrgiotakis, Emmanouil, 2021. "National culture of secrecy and stock price synchronicity: Cross-country evidence," MPRA Paper 105432, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:105432
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    1. Tsalavoutas, Ioannis & Tsoligkas, Fanis, 2021. "Uncertainty avoidance and stock price informativeness of future earnings," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 75(C).
    2. Abdallah, Abed Al-Nasser & Abdallah, Wissam & Saad, Mohsen, 2022. "The impact of national culture on the synchronicity of cross-listed firms," Finance Research Letters, Elsevier, vol. 46(PA).

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    More about this item

    Keywords

    Culture; Information and market efficiency; Stock price synchronicity;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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