Does culture influence on paying behavior?

What is it about?

The paper analyses paying and repaying behavior empirically. The interpretation combines insights from an emerging field in economics known as “culture and finance” with ideas from the economic analysis of social capital and trust in the context of different regulatory systems. The results show that culture has an effect on firms' credit losses, on the overall riskiness of paying behavior and on the level of non-performing bank loans.

Featured Image

Why is it important?

The analysis also shows that high trust and morality are associated with less complex regulation and vice versa. The results help private financial actors, regulators and public policy makers to design more appropriate behavioral environments for paying and repaying.