Catch me if I fall: cross-national differences in willingness to take financial risks as a function of social and state ‘cushioning’

Claudia R. Schneider, Dennis D. Fehrenbacher, Elke U. Weber

Research output: Contribution to journalArticleResearchpeer-review

8 Citations (Scopus)

Abstract

Knowledge about the existence and source of national differences in willingness to take risks plays a vital role in ensuring successful communication, collaboration, and understanding across countries, from the personal to the organizational and political/social domain. The current study investigates differences in financial risk-taking willingness between countries as a function of social and state 'cushioning', i.e. the extent of a person's social support network and the state's social-safety support network. The study compares large-scale household data and self-reports on willingness to take financial risks across three countries differing in their state support networks: Austria, Italy and the United States. Results show that personal social support network size influences risk-taking willingness (social cushioning). Furthermore, and most notably, we find evidence of an interactive relationship between social and state cushioning. High state cushioning renders the influence of social cushioning on financial risk-taking willingness less important. Contributions to management and business practice as well as theory on the influence of personal distance to financial support on risk-taking willingness are discussed.

Original languageEnglish
Pages (from-to)1023-1033
Number of pages11
JournalInternational Business Review
Volume26
Issue number6
DOIs
Publication statusPublished - Dec 2017

Keywords

  • Cross-national comparison
  • Cushion hypothesis
  • Financial risk-taking willingness
  • Social support network
  • State support network

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