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Cultural values and the global financial crisis: a missing link?

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Abstract

We empirically investigate the role of cultural values on the occurrence of the global financial crisis. We use data based on Hofstede (Culture’s consequences: comparing values, behaviors, institutions and organizations across nations, 2001) cultural values indexes and employ two econometric approaches, the self-organizing maps and logit, in a panel set of 38 developed and developing countries. We find that culture has a statistically and economically significant effect on the occurrence of the global financial crisis of 2007–2009. The relationship between cultural factors and the crisis occurrence remains strong when we consider control variables representing different sectors of the economy.

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Source: Mostafa (2010)

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Notes

  1. The data is available upon request.

  2. Note that this is a method used in the literature to construct currency crisis indicators. See Ari (2012) and Ari and Cergibozan (2016) for a detailed analysis.

  3. Note that we exclude, from the logit estimation, two explanatory variables (Broad Money/GDP and NPL/TL) found to be significant in the SOM analysis, due to their high correlation with domestic credit to private sector over GDP (see Table 7 in Appendix).

  4. There are other factors that may affect this risk-taking behavior such as legal, institutional, and social environment (see Aktaruzzaman and Farooq 2020).

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Funding

This study was funded by Istanbul Medeniyet University Scientific Research Projects Office (Grant number S-GAP-2017-1022).

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Authors and Affiliations

  1. Department of Business Administration, Istanbul Medeniyet University, D-100 Karayolu No: 98, 34000, Istanbul, Turkey

    Adem Baltaci

  2. Department of Economics, Kirklareli University, Kayali Kampüsü B-Blok, 39000, Kirklareli, Turkey

    Raif Cergibozan

  3. Department of Political Science and Public Administration, Marmara University, Anadoluhisari Yerleskesi, 34820, Istanbul, Turkey

    Ali Ari

Authors
  1. Adem Baltaci
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  2. Raif Cergibozan
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  3. Ali Ari
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Correspondence to Ali Ari.

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Appendix

Appendix

See Tables 6 and 7.

Table 6 Crisis dates
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Table 7 Correlation matrix
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Baltaci, A., Cergibozan, R. & Ari, A. Cultural values and the global financial crisis: a missing link?. Eurasian Econ Rev 12, 507–529 (2022). https://doi.org/10.1007/s40822-022-00208-6

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  • DOI: https://doi.org/10.1007/s40822-022-00208-6

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