Cultural differences and cross-border investment project performance: an analysis of the Polish banking sector

Abstract

In recent decades, the Polish banking sector has experienced a large number of mergers and acquisitions (M&As) as well as the establishment of several new banks. The success of such investment projects can be influenced by numerous factors, including the cultural differences between the country of the bank initiating the transaction and Poland. The objective of this article is to assess the influence of these cultural differences on the performance of cross-border investment projects carried out in the Polish banking sector from 1994 to 2018. The results of this study confirm that cultural differences influence bank performance: the culturally closer the countries are, the better the banks perform. Specifically, the dimensions of power distance, individualism, uncertainty avoidance and masculinity are the most relevant to bank performance. Future research should be focused on determining the role that cultural differences exert on the cross-border consolidation of the European banking sector.