Cultural dynamics and financial success in listed energy giants: The hidden forces of the global market

This study thoroughly investigates the impact of cultural factors on capital structure decisions and explores the role of cultural variables in financial decision-making processes. The existing literature was reviewed as part of the research. The effects of cultural differences on capital structure decisions were analyzed through the interaction between Hofstede’s subregional continent classification and Gelfand’s cultural tightness classification, alongside the financial performance of companies listed on the stock exchanges of selected countries. A sample of 1,417 energy companies traded in the capital markets of 28 countries was examined in this context. The literature examined the relationship between key financial metrics—commonly used to determine the price-earnings ratio and the debt and equity financing preferences of these companies. The analysis reveals that the cultural dimensions of power distance and individualism/collectivism have a positive and significant impact on the price-earnings ratio, while the masculinity/femininity dimension exerts a negative and significant influence on the long-term debt-equity ratio. These findings emphasize key factors that organizations should consider in strategic management and cultural practices. The conclusion discusses the practical and theoretical implications and offers recommendations for improving financial strategies.