Does Finance have a cultural Dimension?

According to the traditional view held in finance returns of assets are determined by complete rationality of decision makers. Rational decisions are defined by a set of axioms that are universal and do not leave room for cultural differences. In this article we show that cultural differences do mater for financial decisions. Cultural differences lead to systematic deviations from rational decision making that lead to cultural differences in risk taking, negotiations for direct investment, mergers & acquisitions as well as in returns of bonds and stocks at local markets.