Karkowska, R.; Korzeb, Z.; Niedziółka, P. & Nistor, S. (2026) Journal of International Financial Markets, Institutions & Money [Core Economics, Q1]

Publicat: 02 Octombrie 2026

Karkowska, R.; Korzeb, Z.; Niedziółka, P. & Nistor, S. (2026) Banking on Culture: Individualism and Foreign Bank Ownership. Journal of International Financial Markets, Institutions & Money, 113, 102396.

DOI: https://doi.org/10.1016/j.intfin.2026.102396

✓ Publisher: Elsevier
✓ Categories: Business, Finance; Economics
✓ Article Influence Score (AIS): 0,930 (2025) / Q1 in Business, Finance; Q2 in Economics.


Abstract:
How do a country’s cultural values shape the extent of foreign ownership in its banking sector? Using data for 49 countries from 2007 to 2021, we provide novel evidence that individualism exhibits an inverted U-shaped relationship with foreign bank ownership. Moderate individualism levels attract foreign capital, while excessive individualism deters it. This nonlinear pattern is consistent with the view that moderate individualism operates effectively in institutional environments enabling foreign capital access, while excessive individualism appears misaligned with such conditions. Critically, the inverted U is not universal—it is absent in financially closed economies but fully materializes with capital account openness. Bank competition, capital regulatory stringency, external creditor monitoring, and entry denial rates systematically shift the turning point, with entry barriers showing how administrative restrictions can reshape the nonlinear relationship. Our findings demonstrate that culture and institutions jointly shape cross-border banking investment, with capital account openness, competitive dynamics, regulatory quality, and entry barriers determining when and how strongly individualism influences foreign bank ownership.

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