The effects of national culture on financial sector development: Evidence from emerging and developing economies

This study investigates the effects of national culture on financial sector development in emerging and developing economies. Prior literature on culture and finance has placed little focus on the multidimensionality of national culture and its potential implications for financial sector development. Therefore, this study contributes to the ongoing debate surrounding culture and finance by exploring broader cultural perspectives. The empirical findings show that national culture significantly explains cross-country differences in financial sector development. Various dimensions of national culture have a distinctive impact on financial sector development; for example, individualism and masculinity play boosting role, whereas uncertainty avoidance hampers it. The overall findings are reliable to a series of robustness checks and offer useful policy implications for governments, regulatory agencies, and other stakeholders.