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Fresh off the boat: Cultural value distance and cross-regional investment
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DOI：10.1016/j.jbankfin.2026.107702.png)
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Abstract
En 中文
This paper is one of the first to provide empirical evidence that cultural value distance affects domestic capital allocation in the context of cross-regional investment. Examining regional variation in China, we find that cultural value distance in ownership, trust, and opportunism dimensions negatively impacts the volume of cross-regional investment. These results are robust to several alternative measures, and instrumental variable approaches using terrain distance and surname difference. We explore whether regional cultural values influence cross-regional investment through information distance and social network mechanisms, as well as their potential to increase operating costs. We also find that this negative effect is more pronounced among regions with high Confucian difference, dialect distance, and market segmentation difference. Further, the results show that the cultural values of CEOs and politicians have a significant influence on corporate investment decisions.
Keywords:
cultural value distance
cross-regional investment
capital allocation
regional variation
Confucian values
Journal
J
IF:
3.8
Papers:
65
Citations:
0
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Cited Papers