Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Cultural adaptation and corporate investment decisions: evidence from inter-regional investments

Cultural adaptation and corporate investment decisions: evidence from inter-regional investments Corporate inter-regional investment is an important channel for building the domestic economic cycle. This paper explores the impact of firms’ adaptation to regional culture on inter-regional investment based on the sample of newly-established inter-province subsidiaries of A-share listed firms in China from 2006 to 2017. We find that (1) Firms’ low cultural adaptation to home region promote corporate inter-regional investment. (2) Firms are more likely to invest in regions with cultural environments that are more compatible with their own culture value (3) Firms have better investment performance when investing in more culturally adapted regions through better cooperating with new stakeholders and reducing management cost. (4) The impact of cultural adaptation on inter-regional investments is also affected by the state ownership and corresponding regional formal institutions. Our findings have implications for firms to make location choice during inter-regional investment and can help governments attract capital flows. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png China Journal of Accounting Studies Taylor & Francis

Cultural adaptation and corporate investment decisions: evidence from inter-regional investments

29 pages

Loading next page...
 
/lp/taylor-francis/cultural-adaptation-and-corporate-investment-decisions-evidence-from-syuKWyByud

References (38)

Publisher
Taylor & Francis
Copyright
© 2023 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
ISSN
2169-7221
eISSN
2169-7213
DOI
10.1080/21697213.2023.2239668
Publisher site
See Article on Publisher Site

Abstract

Corporate inter-regional investment is an important channel for building the domestic economic cycle. This paper explores the impact of firms’ adaptation to regional culture on inter-regional investment based on the sample of newly-established inter-province subsidiaries of A-share listed firms in China from 2006 to 2017. We find that (1) Firms’ low cultural adaptation to home region promote corporate inter-regional investment. (2) Firms are more likely to invest in regions with cultural environments that are more compatible with their own culture value (3) Firms have better investment performance when investing in more culturally adapted regions through better cooperating with new stakeholders and reducing management cost. (4) The impact of cultural adaptation on inter-regional investments is also affected by the state ownership and corresponding regional formal institutions. Our findings have implications for firms to make location choice during inter-regional investment and can help governments attract capital flows.

Journal

China Journal of Accounting StudiesTaylor & Francis

Published: Jul 3, 2023

Keywords: Cultural adaptation; inter-regional investment; opportunism; inter-regional development

There are no references for this article.