<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>There is a growing body of research that shows the impact of culture on individual’s financial decisions. We aim to investigate how the strength of social norms and the tolerance for deviant behavior influence stock liquidity. Using a panel of 26 developed and 19 emerging countries we show that there is an inverted U-shaped relationship between the measure of cultural tightness-looseness, developed by Gelfand et al. (2011) and stock liquidity. Additionally, our results suggest that financial literacy has a moderating effect on the relationship between social norms and liquidity.</p>
</abstract>

There is a growing body of research that shows the impact of culture on individual’s financial decisions. We aim to investigate how the strength of social norms and the tolerance for deviant behavior influence stock liquidity. Using a panel of 26 developed and 19 emerging countries we show that there is an inverted U-shaped relationship between the measure of cultural tightness-looseness, developed by Gelfand et al. (2011) and stock liquidity. Additionally, our results suggest that financial literacy has a moderating effect on the relationship between social norms and liquidity.

The Impact of Social Norms on Stock Liquidity

Studia Universitatis Babes-Bolyai Oeconomica

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

{"article-title":"The Impact of Social Norms on Stock Liquidity"}

There is a growing body of research that shows the impact of culture on individual’s financial decisions. We aim to investigate how the strength of social...

The Impact of Social Norms on Stock Liquidity

Published Online: May 08, 2023

Page range: 78 - 99

DOI: https://doi.org/10.2478/subboec-2023-0005

Keywords
social norms, liquidity, trust, information asymmetry, financial literacy

© 2023 Andrei Dimcea, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

The Impact of Social Norms on Stock Liquidity

Published Online: May 08, 2023

Page range: 78 - 99

DOI: https://doi.org/10.2478/subboec-2023-0005

Keywordssocial norms, liquidity, trust, information asymmetry, financial literacy

© 2023 Andrei Dimcea, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
social norms, liquidity, trust, information asymmetry, financial literacy