Impact of National Culture on Stock Markets’ Returns and Volatility: Evidence from BRICS-P

• Published in: Jinnah Business Review 2024-01, Vol.12 (1), p.1-17
• Main Authors: Khan, M. A., Shabbir, H.
• Format: Article
• Language: English
• ISSN: 2307-7921; 2070-0296
• DOI: 10.53369/QLQL3328

This study aims to investigate how national cultures affect stock market returns across the BRICS economies and Pakistan. The conceptual framework is how national cultures affect stock return and volatility with six dimensions (PDI, UAI, MAS, LTO, IDV, and IVR) and two control variables, the exchange rate and interest rate. The data samples are extracted from Six BRICS’P nations, including Brazil, Russia, India, China, South Africa, and Pakistan for the period from January 1, 2011, through December 31, 2021. Regression analysis using panel data was utilized in this study to examine the effects of the major factors both individually and collectively. The results of panel data analysis indicate that National culture has little effect on returns from all six countries. Furthermore, only MAS has a negative substantial impact on return in the national culture dimension. Volatility is adversely affected by national culture. National cultures affect stock market volatility and returns globally, but because it analyses long-term data and Hofstede’s culture modifies the data over the years.