A New Era of Capital Structure Choices in Technology Firms: Insights on Cultural Dimensions
This study investigates the correlation between corporate financial ratios and cultural dimensions across countries in order to guide technology firms in adapting to the current financial landscape characterized by limited borrowing options and higher interest rates. Using Hofstede’s subregional con...
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| Format: | Article |
| Language: | English |
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Istanbul University Press
2024-06-01
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| Series: | Journal of Economy Culture and Society |
| Subjects: | |
| Online Access: | https://dergipark.org.tr/en/download/article-file/3170845 |
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| author | Süleyman Değirmen Mert Aktaş Ömür Saltık Filiz Bozagaç |
| author_facet | Süleyman Değirmen Mert Aktaş Ömür Saltık Filiz Bozagaç |
| author_sort | Süleyman Değirmen |
| collection | DOAJ |
| description | This study investigates the correlation between corporate financial ratios and cultural dimensions across countries in order to guide technology firms in adapting to the current financial landscape characterized by limited borrowing options and higher interest rates. Using Hofstede’s subregional continental classification, it examines the relationship betweencapital structure and value among 4,237 publicly listed technology firms in 46 countries. The study analyzes financial ratios and connects them with Hofstede’s subdimensions of individualism and uncertainty avoidance culture. The findings reveal a significant relationship between cultural dimensions and financial ratios, with individualism and uncertainty avoidance being influential factors. Countries emphasizing individuality tend to have higher borrowing rates, whereas those with a strong preference for uncertainty avoidance exhibit higher gross margins and total debt-to-equity ratios. The borrowing rate variable does not directly affect the dimensions of femininity versus masculinity and uncertainty avoidance; however, it impacts the dimension of individualism versus collectivism. Overall, this study provides valuable insights to enable technology firms to make informed decisions, manage financial structures, and effectively navigate the current financial landscape. |
| format | Article |
| id | doaj-art-bc207336713a4ec2a92997d278cb48b3 |
| institution | Kabale University |
| issn | 2645-8772 |
| language | English |
| publishDate | 2024-06-01 |
| publisher | Istanbul University Press |
| record_format | Article |
| series | Journal of Economy Culture and Society |
| spelling | doaj-art-bc207336713a4ec2a92997d278cb48b32025-02-04T10:17:33ZengIstanbul University PressJournal of Economy Culture and Society2645-87722024-06-0169153210.26650/JECS2023-13044004A New Era of Capital Structure Choices in Technology Firms: Insights on Cultural DimensionsSüleyman Değirmen0https://orcid.org/0000-0001-8750-652XMert Aktaş1https://orcid.org/0000-0003-3791-6664Ömür Saltık2https://orcid.org/0000-0001-8507-8971Filiz Bozagaç3https://orcid.org/0000-0002-3764-0111MERSIN UNIVERSITY, FACULTY OF ECONOMICS AND ADMINISTRATIVE SCIENCES, DEPARTMENT OF ECONOMICSToros University, Department of BusinessKONYA FOOD AND AGRICULTURE UNIVERSITY, FACULTY OF SOCIAL AND HUMAN SCIENCES, DEPARTMENT OF ECONOMICSToros University, Department of BusinessThis study investigates the correlation between corporate financial ratios and cultural dimensions across countries in order to guide technology firms in adapting to the current financial landscape characterized by limited borrowing options and higher interest rates. Using Hofstede’s subregional continental classification, it examines the relationship betweencapital structure and value among 4,237 publicly listed technology firms in 46 countries. The study analyzes financial ratios and connects them with Hofstede’s subdimensions of individualism and uncertainty avoidance culture. The findings reveal a significant relationship between cultural dimensions and financial ratios, with individualism and uncertainty avoidance being influential factors. Countries emphasizing individuality tend to have higher borrowing rates, whereas those with a strong preference for uncertainty avoidance exhibit higher gross margins and total debt-to-equity ratios. The borrowing rate variable does not directly affect the dimensions of femininity versus masculinity and uncertainty avoidance; however, it impacts the dimension of individualism versus collectivism. Overall, this study provides valuable insights to enable technology firms to make informed decisions, manage financial structures, and effectively navigate the current financial landscape.https://dergipark.org.tr/en/download/article-file/3170845cultural dimensionscorporate financecapital structurestructural equation modeltechnology sector |
| spellingShingle | Süleyman Değirmen Mert Aktaş Ömür Saltık Filiz Bozagaç A New Era of Capital Structure Choices in Technology Firms: Insights on Cultural Dimensions Journal of Economy Culture and Society cultural dimensions corporate finance capital structure structural equation model technology sector |
| title | A New Era of Capital Structure Choices in Technology Firms: Insights on Cultural Dimensions |
| title_full | A New Era of Capital Structure Choices in Technology Firms: Insights on Cultural Dimensions |
| title_fullStr | A New Era of Capital Structure Choices in Technology Firms: Insights on Cultural Dimensions |
| title_full_unstemmed | A New Era of Capital Structure Choices in Technology Firms: Insights on Cultural Dimensions |
| title_short | A New Era of Capital Structure Choices in Technology Firms: Insights on Cultural Dimensions |
| title_sort | new era of capital structure choices in technology firms insights on cultural dimensions |
| topic | cultural dimensions corporate finance capital structure structural equation model technology sector |
| url | https://dergipark.org.tr/en/download/article-file/3170845 |
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