Abstract:

This study examines the indirect influence of Hofstede's cultural values of uncertainty avoidance, short-term orientation, and individualism on a country's risk-taking levels using the risk-takers national-centric and cultural theories in 50 countries. The authors used secondary data from several resources to test the three hypotheses and used bivariate, multiple regression analysis, and Sobel Test. Data for the three cultural values were borrowed from Hofstede's website study in 2011. Besides, data for completion were borrowed from the Global Competitiveness Report 2019 website. Furthermore, data for risk-taking were borrowed from the Our World in Data website in 2019. Finally, data for the three economic development indicators (i.e., country GDP growth volatility, country market capitalization, GDP per capita) were borrowed from the World Bank's World Development Indicators 2019. The study results show a positive, significant and indirect relationship between individualism and the country's risk-taking levels through completion. The results also show a negative, significant indirect relationship between short-term orientation and a country's risk-taking levels through competition. However, the indirect relationship between uncertainty avoidance and a country's risk-taking levels through competition is not significant. Theoretically, these study results contribute to the literature by explaining the indirect effects of national culture on irrational risk-taking decisions through competition. For practitioners, the findings in this study are consistent with earlier studies showing that cultural values influence how companies make decisions that are influenced by their national culture and the levels of competition. Therefore, these study findings could be applied to enhance international business, management practices, and culture training. The findings might also reinforce the growing awareness among management and finance scholars and formal institutions such as investor protection.