Determinants of corporate exposure at default under distressed economic and financial conditions in a developing economy: the case of Zimbabwe

Matenda, Frank Ranganai; Sibanda, Mabutho; Chikodza, Eriyoti; Gumbo, Victor

doi:10.1057/s41283-021-00071-w

Cited by 5 publications

(1 citation statement)

References 37 publications

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“…A number of studies have been conducted to examine the factors that affect risk in the financial sector to avoid extreme moments before it occurs (Tripe et al, 2009;McKelvey and Andriani, 2010;Kanno, 2018;Schnatterly et al, 2018;Wen et al, 2020;Matenda et al, 2021). For example, studies have explored the role of governance (Chavarín, 2020), bank risk shifting and diversification (Alaabed et al, 2016;Batten and Vo, 2016), information system security (Koskosas, 2008;Jakšič and Marinč, 2018), operational risk (Blacker, 2000), contagion risk (Der Su, 2018), managerial practices (Al Khattab et al, 2008), and organizational culture (Imran et al, 2021) in the financial sector to mitigate the risk.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

How does CEO power and overconfidence affect the systemic risk of China’s financial institutions?

2022

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The purpose of this paper is two-fold. First, this study measures the contribution of banks and non-bank financial institutions toward the systemic risk of China. Second, the present study investigates the relationship between CEO power, CEO overconfidence, and systemic risk. This study uses the Delta Conditional Value-at-Risk (∆CoVaR) method to measure the systemic risk contribution of firms listed on the Shenzhen and Shanghai stock exchanges over a period of 2006–2018. The results show that non-bank financial institutions are systemically more important compared to banks. We employed fixed-effect regression analysis to show that banks with overconfident CEOs increase the firm’s systemic risk. The results also confirm that powerful CEOs enhance the contribution of non-bank financial institutions to systemic risk, whereas CEO power’s impact was significant only for non-state-owned banks. The findings were further validated by the robustness test results obtained using the two-stage least squares approach. These findings are important for constructing regulations to reduce the contribution of firms to systemic risk.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

How does CEO power and overconfidence affect the systemic risk of China’s financial institutions?

2022

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State guarantees to counteract the financial effects of the COVID-19 pandemic on industrial supply chains

Drago

Aiello

Lombardo

et al. 2023

Heliyon

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Effect of Probability of Default and Financial Performance of Commercial Banks in Kenya

Joel,

Tibbs,

Muli

2024

JBSEE

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Purpose: Specific objectives are to establish the effect of effect of probability of default and financial performance of Commercial Banks in Kenya. The theoretical framework was based on asymmetric information. Methodology/Approach: The adopted mixed research comprising of causal and longitudinal research designs. The study used all commercial banks which are 42 it total. Positivism research philosophy was adopted. The study used secondary data from financial statements of banks. Data was analyzed by both descriptive and inferential statistics. Data was presented using tables. Findings: From the findings Probability of default negatively affects the Performance of Commercial Banks in Kenya as indicated by a p value of 0.00 in the fixed effect model. This can be explained as a result of the following possible factors: Loans with higher Probability of default are more likely to become non-performing assets or be classified as doubtful debts. Implications: Implementing a credit risk stress testing plan can effectively mitigate the likelihood of a bank encountering a financial crisis. In order to mitigate liquidity risk, it is advisable for banks to augment their liquid holdings.

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Determinants of corporate exposure at default under distressed economic and financial conditions in a developing economy: the case of Zimbabwe

Cited by 5 publications

References 37 publications

How does CEO power and overconfidence affect the systemic risk of China’s financial institutions?

How does CEO power and overconfidence affect the systemic risk of China’s financial institutions?

State guarantees to counteract the financial effects of the COVID-19 pandemic on industrial supply chains

Effect of Probability of Default and Financial Performance of Commercial Banks in Kenya

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