Power distance and landlord-tenant practices across countries

Purpose – This paper aims to investigate whether cultural dimension of power distance, which is the extent that inequality is expected and accepted in societies, can explain underlying differences in landlord-tenant practices (LTP) across countries. Design/methodology/approach – The authors use a sample covering countries from different regions. They apply the ordered probit regressions to estimate the relationships between the explanatory variables and LTP. Findings – The results show that hierarchical societies demonstrate more pro-landlord practices. This finding is robust to alternative measures of power distance and different sample sizes. In addition, the authors find that countries with larger rental sectors and larger numbers of landlords with mortgages demonstrate more pro-tenant practices. The results also show that differences in LTP across countries are not significantly influenced by legal origin. Originality/value – To the best of the authors’ knowledge, very limited studies have investigated the determinants of LTP across countries. In addition, while cultural values such as power distance have been used to explain the economic, social and financial variables, less, if any, number of studies have used them to explain the variation of real estate market variables such as LTP.