Investor Risk Preference Differentiation Mechanism and Cross-Market Strategies under Cultural Dimension Differences

Globalized financial markets demonstrate persistent heterogeneity in investor risk preferences, with individualist markets exhibiting significantly higher equity turnover than collectivist markets. However, the literature rarely integrates cultural psychology with behavioral finance in a unified empirical model. This study develops the Culture–Cognirtion–Decision framework, combining Hofstede’s six cultural dimensions with behavioral finance theory to examine how cognitive biases mediate the effect of cultural values on investment behavior. Using a multinational panel dataset covering sixty-one countries from 2014--2024 and applying a two-way fixed-effects regression with instrumental variables and the system generalized method of moments estimation, individualism positively correlates with equity allocation, collectivism amplifies herding behavior, high uncertainty avoidance suppresses speculative trading, long-term orientation distorts the disposition effect, and indulgence increases leverage tolerance. On the basis of these findings, a Culturally Adaptive Portfolio Strategy that adjusts asset weights following the cultural profiles of target markets is proposed. The results confirm that incorporating cultural psychology into financial decision-making produces measurable improvements in global asset allocation efficiency.