Corporate culture and firm value: evidence from crisis
Corporate culture and firm value: evidence from crisis
Based on the Competing Values Framework (CVF), we score 10-K text to measure company culture in four types (collaborative, controlling, competitive, and creative) and examine its role in firm stability. We find that firms with higher controlling culture fared significantly better during the 2008-09 crisis. Firms with stronger controlling culture experienced fewer layoffs, less negative asset growth, greater debt issuance, and increased access to credit-line facilities during the crisis. The positive effect of the controlling culture is stronger among the financially-constrained firms. Overall, the controlling culture improves firm stability through greater support from capital providers.
corporate culture, competing values framework, textual analysis, financial crisis, abnormal returns, firm stability
Fang, Yiwei
da421a4f-34db-461e-8b9d-a29147fe0301
Fiordelisi, Franco
29337b1e-43e4-48b1-880c-0527af6dbce2
Hasan, Iftekhar
c13f965e-f6fb-4a1b-af48-e7cb8340f3d0
Leung, Woon Sau
73a8bf54-6035-4f11-a9ec-74272abbacb5
Wong, Gabriel
0c78a263-f621-4e9a-a1ad-017eb5a858fc
4 November 2022
Fang, Yiwei
da421a4f-34db-461e-8b9d-a29147fe0301
Fiordelisi, Franco
29337b1e-43e4-48b1-880c-0527af6dbce2
Hasan, Iftekhar
c13f965e-f6fb-4a1b-af48-e7cb8340f3d0
Leung, Woon Sau
73a8bf54-6035-4f11-a9ec-74272abbacb5
Wong, Gabriel
0c78a263-f621-4e9a-a1ad-017eb5a858fc
Fang, Yiwei, Fiordelisi, Franco, Hasan, Iftekhar, Leung, Woon Sau and Wong, Gabriel
(2022)
Corporate culture and firm value: evidence from crisis.
Journal of Banking and Finance, 146, [106710].
(doi:10.1016/j.jbankfin.2022.106710).
Abstract
Based on the Competing Values Framework (CVF), we score 10-K text to measure company culture in four types (collaborative, controlling, competitive, and creative) and examine its role in firm stability. We find that firms with higher controlling culture fared significantly better during the 2008-09 crisis. Firms with stronger controlling culture experienced fewer layoffs, less negative asset growth, greater debt issuance, and increased access to credit-line facilities during the crisis. The positive effect of the controlling culture is stronger among the financially-constrained firms. Overall, the controlling culture improves firm stability through greater support from capital providers.
Text
1-s2.0-S0378426622002904-main
- Version of Record
More information
Accepted/In Press date: 25 October 2022
e-pub ahead of print date: 26 October 2022
Published date: 4 November 2022
Additional Information:
Funding Information: We thank the Editor (Professor Thorsten Beck), an Associate Editor, two anonymous reviewers, and seminar participants at the University of Edinburgh Business School for their useful comments, discussion, and suggestions. All errors are our own.
Keywords:
corporate culture, competing values framework, textual analysis, financial crisis, abnormal returns, firm stability
Identifiers
Local EPrints ID: 484602
URI: http://eprints.soton.ac.uk/id/eprint/484602
ISSN: 0378-4266
PURE UUID: 6cc7ea3d-4048-447d-a224-ba893bc775e8
Catalogue record
Date deposited: 17 Nov 2023 18:00
Last modified: 18 Mar 2024 04:17
Export record
Altmetrics
Contributors
Author:
Yiwei Fang
Author:
Franco Fiordelisi
Author:
Iftekhar Hasan
Author:
Woon Sau Leung
Author:
Gabriel Wong
Download statistics
Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.
View more statistics