The Effect of National Culture on Debt Risk: An Empirical Analysis of “Belt and Road” Countries
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Wang Lu, Li Yanxi, Ouyang Shanshan
This paper examines the relation between three dimensions of national culture (individualism, short-term orientation and uncertainty avoidance) and debt risk using a sample of 65 BRI countries during the period from 2008 to 2017. The empirical results showthat strong individualism and short-term orientation leads to higher national debt risk, while strong uncertainty avoidance leads to lower national debt risk. Further research indicates that international cooperation plays a moderating role in the relationship between national culture and debt risk. It alleviates the negative effect of individualism and short-term orientation on national debt risk. The study proposes to consider national culture in the assessment of the debt risk of BRI countries and it provides empirical evidence and supplementationto the existing literatures from informal institutional perspective.
National culture; debt risk; “Belt and Road” Initiative