The Relationship Between National Culture and Risk-taking Among Countries: Should Researcher Rethink Competition?

Abstract: This study explores the indirect impact of the cultural values of masculinity, individualism, and collectivism on a country's risk-taking levels using the risk-takers national-centric and cultural theories in fifty-one countries. The authors used secondary data from various sources, Sobel Test Calculator, bivariate, and multiple regression analysis to examine their hypotheses. Data sources incorporated were Hofstede's website study in 2011. In addition, data for the competition were obtained from the Global Competitiveness Report 2019 website. Furthermore, data for risk-taking were obtained from the Our World in Data website in 2019. Finally, data for the gross domestic product per capita income (PKY), country market capitalization (CMK), and country gross domestic product growth volatility (PDPGV) were borrowed from the World Bank's World Development Indicators 2019. The research results demonstrate a significant, positive, and indirect relationship between individualism and the country's risk-taking levels through competition. In addition, the results reveal a negative, significant indirect relationship between collectivism and a country's risk-taking levels throughout the competition. Nevertheless, the indirect relationship between masculinity and a country's risk-taking levels throughout the competition is not insignificant. These study findings contribute to the literature by illustrating the indirect impacts of national culture on unreasonable risk-taking decisions throughout the competition. According to the standard economic theories, corporate decisions should be decided only by economic considerations such as profit maximization. However, this study's findings show that culture and competition should be considered for risky corporate decisions. The results are harmonious with previous studies proving that cultural values shape how firms make decisions that are affected by the levels of competition and their national culture. Practitioners could use these study findings to improve culture training programs as well as international finance and international management applications. The findings could also strengthen the growing awareness among finance scholars, management scholars, and formal academic institutions.

Keywords: National Cultural Dimensions, Risk-taking, Competition, Investment Decisions

DOI: 10.54941/ahfe1002295

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