register login
Home - JIPD - Volume 9 - Issue 2
Submit to JIPD
Journal Browser
Search
View All
News and Announcements
View All
Can investment risk-taking mediate the relationship between national cultural dimensions and the financial performance of small enterprises?
Wida Purwidianti
Naelati Tubastuvi
Watemin
Hsing-Hua Hsiung
Journal of Infrastructure Policy and Development 2025, 9(2), 10997; https://doi.org/10.24294/jipd10997
Submitted：20 Dec 2024
Accepted：06 Jan 2025
Published：24 Feb 2025
Download PDF(515.78KB)
XML
Abstract

Research on the role of national culture in finance has shown significant development. This study aims to further explore the relationship between three dimensions of national culture (individualism, uncertainty avoidance, and masculinity) and company performance, mediated by investment risk-taking. The study targets Indonesian SMEs, with a sample of 161 respondents from DKI Jakarta, West Java, Central Java, Yogyakarta, and East Java provinces. The results indicate that higher levels of uncertainty avoidance and masculinity significantly enhance investment risk-taking capacity. Additionally, increased uncertainty avoidance, masculinity, and investment risk-taking contribute to improved SME performance. Mediation analysis further confirms that investment risk-taking mediates the relationship between uncertainty avoidance, masculinity, and firm performance. However, individualism does not show a significant impact on either investment risk-taking or SME performance. This study provides valuable insights for policymakers and SME owners in formulating policies to promote the future development of SMEs.

Keywords
References
Aggarwal, R., Faccio, M., Guedhami, O., et al. (2016). Culture and finance: An introduction. Journal of Corporate Finance, 41, 466–474. https://doi.org/10.1016/j.jcorpfin.2016.09.011
Ashraf, B. N., & Arshad, S. (2017). Foreign bank subsidiaries’ risk-taking behavior: Impact of home and host country national culture. Research in International Business and Finance, 41, 318–335. https://doi.org/10.1016/j.ribaf.2017.04.039
Ashraf, B. N., Zheng, C., & Arshad, S. (2016). Effects of national culture on bank risk-taking behavior. Research in International Business and Finance, 37, 309–326. https://doi.org/10.1016/j.ribaf.2016.01.015
Baule, R., & Fandel, G. (2016). Editorial. Journal of Business Economics, 86(8), 809–811. https://doi.org/10.1007/s11573-016-0833-5
Breuer, W., & Quinten, B. (2009). Cultural Finance. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1282068
Brockhaus, R. (1982). The Psychology of the Entrepreneur. In: Kent, C. D., Sexton, & Vesper, K. (editors), University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN:https://ssrn.com/abstract=1497760.
Burkhard, B., Sirén, C., van Essen, M., et al. (2023). Nothing Ventured, Nothing Gained: A Meta-Analysis of CEO Overconfidence, Strategic Risk Taking, and Performance. Journal of Management, 49(8), 2629–2666. https://doi.org/10.1177/01492063221110203
Chin, W. W. (1998). The partial least squares approach to structural equation modeling. In G. A. Marcoulides (Ed.), Modern methods for business research. Mahwah, NJ: Erlbaum.
Covin, J. G., & Wales, W. J. (2012). The Measurement of Entrepreneurial Orientation. Entrepreneurship Theory and Practice, 36(4), 677–702. https://doi.org/10.1111/j.1540-6520.2010.00432.x
Dahlan, Priyana, Y., & Syam, R. (2023). Influence of Innovation, Creativity, and Risk-Taking on Entrepreneurial Growth and SMEs Performance in Sukabumi City. West Science Business and Management, 1(02), 10–20. https://doi.org/10.58812/wsbm.v1i02.36
Dang, T. L., Faff, R. W., Luong, L. H., et al. (2018). National Culture and Stock Price Crash Risk. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2711204
Delerue, H., & Simon, E. (2009). National cultural values and the perceived relational risks in biotechnology alliance relationships. International Business Review, 18(1), 14–25. https://doi.org/10.1016/j.ibusrev.2008.11.003
Díez-Esteban, J. M., Farinha, J. B., & García-Gómez, C. D. (2018). How does national culture affect corporate risk-taking? Eurasian Business Review, 9(1), 49–68. https://doi.org/10.1007/s40821-018-0105-0
Díez-Esteban, J. M., Farinha, J. B., & García-Gómez, C. D. (2019). Are religion and culture relevant for corporate risk-taking? International evidence. BRQ Business Research Quarterly, 22(1), 36–55. https://doi.org/10.1016/j.brq.2018.06.003
Dvorsky, J., Belas, J., Gavurova, B., et al. (2020). Business risk management in the context of small and medium-sized enterprises. Economic Research-Ekonomska Istraživanja, 34(1), 1690–1708. https://doi.org/10.1080/1331677x.2020.1844588
El-Halaby, S., Hussainey, K., & Al-Maghzom, A. (2017). Multi-Disclosures in the Context of National Cultures: Evidence from Islamic Banks. Advances in Accounting Behavioral Research, 117–157. https://doi.org/10.1108/s1475-148820170000020005
Farooq, U., Ahmed, J., Ashfaq, K., et al. (2020). National culture and firm financial performance: A mediating role of firm financing decision. Cogent Business & Management, 7(1), 1858640. https://doi.org/10.1080/23311975.2020.1858640
Frijns, B., Hubers, F., Kim, D., et al. (2022). National culture and corporate risk-taking around the world. Global Finance Journal, 52, 100710. https://doi.org/10.1016/j.gfj.2022.100710
Gaganis, C., Hasan, I., Papadimitri, P., et al. (2019). National culture and risk-taking: Evidence from the insurance industry. Journal of Business Research, 97, 104–116. https://doi.org/10.1016/j.jbusres.2018.12.037
Games, D., & Rendi, R. P. (2019). The effects of knowledge management and risk taking on SME financial performance in creative industries in an emerging market: the mediating effect of innovation outcomes. Journal of Global Entrepreneurship Research, 9(1). https://doi.org/10.1186/s40497-019-0167-1
García-Lopera, F., Santos-Jaén, J. M., Palacios-Manzano, M., et al. (2022). Exploring the effect of professionalization, risk-taking and technological innovation on business performance. PLOS ONE, 17(2), e0263694. https://doi.org/10.1371/journal.pone.0263694
Getie Mihret, D. (2014). National culture and fraud risk: exploratory evidence. Journal of Financial Reporting and Accounting, 12(2), 161–176. https://doi.org/10.1108/jfra-10-2012-0049
Grinblatt, M., & Keloharju, M. (2001). How Distance, Language, and Culture Influence Stockholdings and Trades. The Journal of Finance, 56(3), 1053–1073. Portico. https://doi.org/10.1111/0022-1082.00355
Hamann, P. M., Halw, O., & Guenther, T. W. (2022). Meta-analysis of the corporate planning—organizational performance relationship: A research note. Strategic Management Journal, 44(7), 1803–1819. Portico. https://doi.org/10.1002/smj.3476
Hofstede, G. (1984). Cultural dimensions in management and planning. Asia Pacific Journal of Management, 1(2), 81–99. https://doi.org/10.1007/bf01733682
Hofstede, G. (2011). Dimensionalizing Cultures: The Hofstede Model in Context. Online Readings in Psychology and Culture, 2(1). https://doi.org/10.9707/2307-0919.1014
Hofstede, G., Hofstede, G. J., & Minkov, M. (2010). Cultures and Organizations: Software of the Mind: Intercultural Cooperation and Its Importance for Survival. 2nd Edition, McGraw-Hill, London.
Hsiao, H. F., Zhong, T., & Wang, J. (2024). Does national culture influence corporate social responsibility on firm performance? Humanities and Social Sciences Communications, 11(1). https://doi.org/10.1057/s41599-023-02538-5
Kabir, A., Ikra, S. S., Saona, P., et al. (2023). Board gender diversity and firm performance: new evidence from cultural diversity in the boardroom. LBS Journal of Management & Research, 21(1), 1–12. https://doi.org/10.1108/lbsjmr-06-2022-0022
Kallmuenzer, A., & Peters, M. (2018). Entrepreneurial behaviour, firm size and financial performance: the case of rural tourism family firms. Tourism Recreation Research, 43(1), 2–14. https://doi.org/10.1080/02508281.2017.1357782
Kanagaretnam, K., Lim, C. Y., & Lobo, G. J. (2014). Influence of National Culture on Accounting Conservatism and Risk-Taking in the Banking Industry. The Accounting Review, 89(3), 1115–1149. https://doi.org/10.2308/accr-50682
Kitigin, B. (2017). Relationship between Risk-Taking and Business Performance among Small and Medium Enterprises in Eldoret Town, Kenya. International Journal of Business and Management Review, 5(7), 52–59.
Krumov, K. D. (2023). Attitudes towards Risk-Taking at the Beginning of the Covid-19 Pandemic: A Cross-Cultural Study. Psychology & Psychological Research International Journal, 8(3), 1–13. https://doi.org/10.23880/pprij-16000356
Kuforiji, J., & Abdelrahim, Y. (2022). The Relationship Between National Culture and Risk-taking Among Countries: Should Researcher Rethink Competition? Human Factors, Business Management and Society, 56(1994), 398–407. https://doi.org/10.54941/ahfe1002295
Kutan, A., Laique, U., Qureshi, F., et al. (2020). A survey on national culture and corporate financial decisions: current status and future research. International Journal of Emerging Markets, 16(7), 1234–1258. https://doi.org/10.1108/ijoem-12-2019-1050
Lech Kurklinski. (2015). Role of National Culture of Foreign Investors in the Area of Credit Risk Management: Case Study of Polish Banking Industry. Management Studies, 3(1). https://doi.org/10.17265/2328-2185/2015.0102.001
Lumpkin, G. T., Cogliser, C. C., & Schneider, D. R. (2009). Understanding and Measuring Autonomy: An Entrepreneurial Orientation Perspective. Entrepreneurship Theory and Practice, 33(1), 47–69. https://doi.org/10.1111/j.1540-6520.2008.00280.x
Luong, Q. D., Vo, D. H., & Ho, C. M. (2024). Chief Executive Officer’s national culture and bank risk‐taking behavior: International evidence. Scottish Journal of Political Economy, 71(3), 492–513. Portico. https://doi.org/10.1111/sjpe.12378
Marino, L. D., Dickson, P., & Weaver, K. M. (2010). Cultural Influences on Entrepreneurial Orientation: The Impact of National Culture Proactiveness in SMEs. Entrepreneurship Theory and Practice, 959–984. https://doi.org/10.1111/j.1540-6520.2010.00396.x
Morck, R., Wolfenzon, D., & Yeung, B. (2005). Corporate Governance, Economic Entrenchment, and Growth. Journal of Economic Literature, 43(3), 655–720. https://doi.org/10.1257/002205105774431252
Mourouzidou-Damtsa, S., Milidonis, A., & Stathopoulos, K. (2017). National culture and bank risk-taking. Journal of Financial Stability, 40, 132–143. https://doi.org/10.1016/j.jfs.2017.08.007
Nabeel-Rehman, R., & Nazri, M. (2019). Information Technology Capabilities and SMEs Performance: An Understanding of a Multi-Mediation Model for the Manufacturing Sector. Interdisciplinary Journal of Information, Knowledge, and Management, 14, 253–276. https://doi.org/10.28945/4429
Nadler, C., & Breuer, W. (2017). Cultural Finance as a research field: an evaluative survey. Journal of Business Economics, 89(2), 191–220. https://doi.org/10.1007/s11573-017-0888-y
Pour, E. K., Uddin, M., Murinde, V., et al. (2023). CEO power, bank risk-taking and national culture: International evidence. Journal of Financial Stability, 67, 101133. https://doi.org/10.1016/j.jfs.2023.101133
Pratono, A. H. (2018). Does firm performance increase with risk-taking behavior under information technological turbulence? The Journal of Risk Finance, 19(4), 361–378. https://doi.org/10.1108/jrf-10-2017-0170
Purwidianti, W., Rahmawati, I. Y., & Purwanto, L. A. (2022). Information Technology and Religiosity as Moderating Variables of the Relationship between Investment Risk-Taking and Firm Performance. Jurnal Manajemen Dan Kewirausahaan, 10(2), 111–118. https://doi.org/10.26905/jmdk.v10i2.8241
Rahaman, A., Luna, K. F., Ping, Z. L., et al. (2021). Do Risk-Taking, Innovativeness, and Proactivity Affect Business Performance of SMEs? A Case Study in Bangladesh, 8(5), 689–695. https://doi.org/10.13106/jafeb.2021.vol8.no5.0689
Reissová, A., Šimsová, J., Sonntag, R., et al. (2020). The influence of personal characteristics on entrepreneurial intentions: International comparison. Entrepreneurial Business and Economics Review, 8(4), 29–46. https://doi.org/10.15678/eber.2020.080402
Shin, J., Moon, J. J., & Kang, J. (2023). Where does ESG pay? The role of national culture in moderating the relationship between ESG performance and financial performance. International Business Review, 32(3), 102071. https://doi.org/10.1016/j.ibusrev.2022.102071
Silwal, P. P. (2022). Corporate cultures and financial performance: The mediating role of firm innovation. Cogent Business and Management, 9(1). https://doi.org/10.1080/23311975.2021.201048
Suharnomo, & Syahruramdhan, F. N. (2018). Cultural Value Differences Among Ethnic Groups in Indonesia: Are Hofstede’s Indonesian Findings Still Relevant? Journal for Global Business Advancement, 11(1), 6–21.
Willebrands, D., Lammers, J., & Hartog, J. (2012). A successful businessman is not a gambler. Risk attitude and business performance among small enterprises in Nigeria. Journal of Economic Psychology, 33(2), 342–354.
Wu, M. Y., Taylor, M., & Chen, M. J. (2001). Exploring Societal and Cultural Influences on Taiwanese Public Relations. Public Relations Review, 27(3), 317–336. https://doi.org/10.1016/S0363-8111(01)00089-3
Yeboah, M. A. (2014). Analysis of entrepreneurship: How does culture influence risk-taking in SMEs in the Sekondi-Takoradi Metropolis, Ghana? American International Journal of Contemporary Research, 4(2), 131–140.
Zainuddin, M. (2019). How Culture Influences Social and Financial Performance of Microbanks: Evidence from an Empirical Study Mohammad Zainuddin Putra Business School. In: Proceedings of the Un. Conference on Ethics and Sustainable Development at National Kaohsiung University of Science and Technology, December.
Zhang, H., & Aumeboonsuke, V. (2022). Technological Innovation, Risk-Taking and Firm Performance—Empirical Evidence from Chinese Listed Companies. Sustainability (Switzerland), 14(22). https://doi.org/10.3390/su142214688
© 2025 by the EnPress Publisher, LLC. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license.
Previous
article in this issue
Next
article in this issue
Platform
Journals Books Conferences
About us
Who we are Publishing partner Contact Us Latest News Development history Career
Information
Editorial policies Peer Review Process Open Access Policy Research and Publication Ethics Article Processing Charges Advertising Policy
Contact
  • Room 121# 9650 Telstar Ave Unit A El Monte, CA 91731,USA
  • manage@enpress-publisher.com
Privacy & Policy Cookies Policy Disclaimer Terms & Conditions

Copyright © by EnPress Publisher. All rights reserved.

TOP