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This paper investigates the effects of national culture on firm risk-taking, using a comprehensive dataset covering 50,000 firms in 400 industries in 51 countries. Risk-taking is found to be higher for domestic firms in countries with low uncertainty aversion, low tolerance for hierarchical relationships, and high individualism. Domestic firms in such countries tend to take substantially more risk in industries which are more informationally opaque (e.g. finance, mining, IT). Risk-taking by foreign firms is best explained by the cultural norms of their country of origin. These cultural norms do not proxy for legal constraints, insurance safety nets, or economic development.

Management --- Business & Economics --- Industrial Management --- Corporate governance. --- Culture. --- Cultural sociology --- Culture --- Sociology of culture --- Governance, Corporate --- Social aspects --- Civilization --- Popular culture --- Industrial management --- Directors of corporations --- Corporate governance --- Risk --- Corporate culture --- Economic aspects&delete& --- Econometric models --- E-books --- Culture, Corporate --- Institutional culture --- Organizational culture --- Corporations --- Organizational behavior --- Business anthropology --- Economics --- Uncertainty --- Probabilities --- Profit --- Risk-return relationships --- Sociological aspects --- Economic aspects --- Banks and Banking --- Corporate Finance --- Finance: General --- Macroeconomics --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Firm Objectives, Organization, and Behavior: General --- Economic History: Financial Markets and Institutions: General, International, or Comparative --- Corporate Culture --- Diversity --- Social Responsibility --- Multinational Firms --- International Business --- General Financial Markets: General (includes Measurement and Data) --- Price Level --- Inflation --- Deflation --- Financial Markets and the Macroeconomy --- Interest Rates: Determination, Term Structure, and Effects --- Finance --- Multinationals --- Banking --- Foreign corporations --- Competition --- Asset prices --- Financial sector development --- Central bank policy rate --- Economic sectors --- Financial markets --- Prices --- Financial services --- Financial services industry --- Interest rates --- United States