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Credit card payments: do cultural values matter? Evidence from the European Union

Delia Cornea (Department of Finance, EBS Paris/INSEEC U. Research Center, Paris, France)

Managerial Finance

ISSN: 0307-4358

Article publication date: 29 March 2021

Issue publication date: 13 July 2021

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Abstract

Purpose

This study analyzes how cultural and social values shape specific attitudes toward credit cards and indebtedness and consumption behavior.

Design/methodology/approach

The study uses a panel dataset for a selection of European Union countries from 2003 to 2016. The relation between credit card use and social and cultural attitudes is constructed by controlling for past habits in payment behavior and cross-substitution with alternative payment instruments by employing a dynamic panel data analysis based on the system Generalized Method of Moments (GMM) estimator.

Findings

The total value of credit card payments positively correlated with values emphasizing risk-taking attitudes. When analyzing the propensity of using these instruments for larger purchases, the level of trust is the most relevant predictor. However, the results seemed region-specific with some variables correlating consumption behavior with credit card usage depending on the political and the economic background of the country. Moreover, risk-taking attitudes prevail when they are related to the extent to which countries rely on cash as a preferred payment instrument. Also, credit card usage is mainly explained by past habits and the economic context.

Originality/value

The model expands on previous credit card transaction research by including an additional set of cultural values able to account for the complex nature of payment instruments and their effects on indebtedness and consumption behavior.

Keywords

Acknowledgements

The author would like to thank the anonymous reviewers for their valuable remarks.

Citation

Cornea, D. (2021), "Credit card payments: do cultural values matter? Evidence from the European Union", Managerial Finance, Vol. 47 No. 8, pp. 1128-1148. https://doi.org/10.1108/MF-06-2020-0336

Publisher

:

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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