Attila Yaprak accepted for publication in Journal of International Management
Mike Ilitch School of Business Professor of Marketing and International Business Attila Yaprak has been accepted for publication in Journal of International Management, which publishes theoretical and empirical research addressing international business strategy, comparative and cross-cultural management, risk management, organizational behavior, human resource management and more.
The article, “Indulgence and Risk-taking Behavior of Firms: Direct and Interactive Influences,” was co-authored by Ali Alipour (Sabanci University).
Abstract
This study examines the impact of Hofstede’s indulgence vs restraint (IVR) national culture dimension on firms’ risk-taking behavior. We argue that firms in more indulgent societies will show greater risk-taking behavior given their greater inclination for discounting risk-taking losses. We further argue that the buffers that slack resources provide against risk-taking losses and the positive expectations of potential gains from risk-taking provided by growth opportunities will further increase firms’ risk-taking behavior when interacting with indulgence mechanisms. Our findings from a 37-country study support these arguments. They show that high indulgence does increase firms’ risk-taking behavior and slack resources and growth opportunities intensify this causal effect. Tests of three-way interactions further reveal that the positive impact of indulgence on firms’ risk-taking behavior is strongest when both slack resources are abundant and the growth opportunities are high. We extend current knowledge about culture’s effect on firm behavior.
