مساوات طلبی و سرمایه گذاری بین المللی

This study identifies how country differences on a key cultural dimension—egalitarianism—influence international investment flows. A society's cultural orientation toward egalitarianism is manifested by intolerance for abuses of market and political power and a desire for protecting less powerful actors. We show egalitarianism to be based on exogenous factors including social fractionalization, dominant religion circa 1900, and war experience from the 19th century. We find a robust influence of egalitarianism distance on cross-national flows of bond and equity issuances, syndicated loans, and mergers and acquisitions. An informal cultural institution largely determined a century or more ago, egalitarianism exercises its effect on international investment via an associated set of consistent contemporary policy choices. But even after controlling for these associated policy choices, egalitarianism continues to exercise a direct effect on cross-border investment flows, likely through its direct influence on managers' daily business conduct.

Tell a financial economist that cultural distance affects investment and she may cringe. Although evidence obtained during the last decade no longer allows such a claim to be dismissed out of hand (e.g., Grinblatt and Keloharju, 2001, Sarkissian and Schill, 2004 and Chan et al., 2005), the mechanisms that may engender these widely observed correlations remain poorly understood. Some proxies for cultural distance such as common language may provide a partial explanation as measures of friction on information flow. But when, in a related context, a measure of cultural distance based on bilateral score data from the Eurovision Song Contest is said to robustly affect bilateral trade volumes (Felbermayr and Toubal, 2010), one may be justified in feeling discomfort. Such findings challenge one to advance a fuller, theory-driven account of the causal link between cultural distance and investment, and to present robust evidence for such relations.

That culture is such a complicated concept may be among the reasons that prior work in international finance has treated culture essentially as a black box and cultural distance primarily as a factor that may engender information asymmetry and animosity. Drawing on advances in psychology, this study is among the first to open this black box further in order to understand international investment flows. The cultural value dimension framework enabled us to address directly the content of informal institutions and to identify a particular cultural orientation that exhibits a first-order importance for international investment. This study has shown that a key value component central to culture can be identified and measured, that we can explain the factors that influence the formation of this value component, that this component of culture influences important cross-border investment activity, and that it is of first-order importance when placed in a kind of horse race with other institutional determinants.