Local Creative Culture and Firm Value

D’ Costa, Mabel; Habib, Ahsan

Abstract

In this paper we investigate the association between local creative culture, and firm value. Using data of US listed firms, we find strong evidence that firms headquartered in US counties with highly creative cultures generate higher firm value. We also find evidence that the positive association between creative culture and firm value is mediated partially through both the innovation and cash holding channels. Our results hold after controlling for endogeneity concerns. Our study contributes to the emerging literature on local creative culture by documenting that such a culture influences managers to undertake risky but profitable projects, thereby, increasing firm value.

Citation

D’ Costa, M., & Habib, A. (2024). Local Creative Culture and Firm Value. Finance Research Letters, 59, Article 104701. https://doi.org/10.1016/j.frl.2023.104701

• Journal Article Type: Article
• Acceptance Date: Nov 8, 2023
• Online Publication Date: Nov 16, 2023
• Publication Date: 2024-01
• Deposit Date: Dec 4, 2023
• Publicly Available Date: Dec 4, 2023
• Journal: Finance Research Letters
• Print ISSN: 1544-6123
• Electronic ISSN: 1544-6131
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 59
• Article Number: 104701
• DOI: https://doi.org/10.1016/j.frl.2023.104701
• Public URL: https://durham-repository.worktribe.com/output/1932431