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Contribution Details

Type Journal Article
Scope Discipline-based scholarship
Title Cultural Preferences and Firm Financing Choices
Organization Unit
Authors
  • Mascia Bedendo
  • Emilia Garcia
  • Linus Siming
Item Subtype Original Work
Refereed Yes
Status Published electronically before print/final form (Epub ahead of print)
Language
  • English
Journal Title Journal of Financial and Quantitative Analysis
Geographical Reach international
Volume forthcoming
Page Range -
Date 2019
Abstract Text We document significant differences in the financing structure of small firms with managers of diverse cultural backgrounds. To isolate the effect of culture, we exploit cultural heterogeneity within a geographical area with shared regulations, institutions, and macroeconomic cycles. Our findings suggest that there exist significant cultural differences in the preference towards debt funding and in the use of formal and informal sources of financing (bank loans and trade credit). Our results are robust to alternative explanations based on potential differences in credit constraints and in the distribution of cultural origins across industries, trading partners, and headquarters location.
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Digital Object Identifier 10.1017/S0022109019000103
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