Cultural Characteristics, Financial Behavior And Financial Development

With the development of financial theory and practice, especially since the outbreak of the global financial crisis in2008, the academics expect more urgently to find the regularities between financial behavior and financial development through studying the people’s social properties, which means that the cultural characteristics which people possess at spiritual level should be a important key to look into this topic. Under this context, this dissertation which focuses on the theme of cultural characteristics, financial behavior and financial development has obvious theory value and practical significance.By using the prevailing research methods of current culture-economics, aiming at the stability of the culture, and following three basis points which are faith, trust and cross-cultural dimension, this paper studies the relevance between cultural characteristics and the behavior of households’borrowing, operating performance of insurance industry and the efficiency of financial development respectively. More evidences of correlation between culture and finance have been found from these three aspects of micro-level, industry-level and macro-level.Firstly, using large-scale micro society survey data in the United States and China, it is found through comprehensive analysis that religion faith significantly affects the decision behavior of households’ borrowing, both in the United States with a strong religious atmosphere and in China with less religion believers. If other conditions remain unchanged, more devout respondents’family will borrow at lower probability. Meanwhile, respondents from different religious denomination has been affected to the significant different extent, for example, in China, compared to individuals with no religious faith, the individuals with beliefs in Buddhism have lower probability to borrow, while individuals with other beliefs have no significant difference. Particularly, in order to clearly show the unidirectional causality and overcome the possible endogenous problem, the method of robustness tests such as instrumental variables and fixed effects models, etc have been used. After studying the actual situation and analyzing the data in the United States, for the reason why religion can affect borrowing behavior, it is likely that religious doctrine could make people become more disciplined and have more long-term planning on their consumption and saving behavior so as to not borrow easily.Secondly, by using cross-regional data of China, this dissertation finds the evidences that the level of regional trust significantly affect the operating performance of insurance industry. Compared to empirical analysis of previous literatures which only focus on general trust, combining the trust data from the World Values Survey Database and cross-regional trust survey data, this paper examines the level of trust’s impact on the performance of regional property insurance and life insurance business from two aspects of "trusting" and "trusted". It is found the "trusted" closely related to the goodwill has a significant positive impact on regional property insurance sales, and the "trusting" closely related to the risk appetite has a significant negative impact on regional property insurance sales.Thirdly, through adopting the six dimensions of culture summarized by Hofstede’s research team, it is found that there are significant difference of the correlation between the efficiency of financial development and the dimensions respectively. It is verified that Power Distance, Individualism and Pragmatism have significant correlation with the efficiency of financial development by using correlation analysis method. By using regression analysis method further, the correlation between Power Distance, Individualism and the efficiency of financial development can be explained through the effect of intermediate variable of GDP per capita. Meanwhile the impact of Pragmatism on the efficiency of financial development is more direct and stable, and it shows in the countries with greater Pragmatism, there will be more efficiency of direct financing and less efficiency of indirect financing.