Effects of national culture on bank risk-taking behavior

Ashraf, Badar Nadeem; Zheng, Chao; Arshad, Sidra

doi:10.1016/j.ribaf.2016.01.015

Cited by 170 publications

(174 citation statements)

References 48 publications

Supporting

Mentioning

118

Contrasting

Unclassified

Order By: Relevance

“…Several studies such as Ashraf et al (2016c), Ashraf (2017b), Nguyen et al (2012), and Sanya and Wolfe (2011) have used Z-score to measure bank risk. Again, after running baseline models and favorable diagnostic tests as detailed in Table 8, we have preferred two-step system GMM models.…”

Section: Robustness Of Resultsmentioning

confidence: 99%

The Impact of Revenue Diversification on Bank Profitability and Stability: Empirical Evidence from South Asian Countries

Nisar

Peng

Wang

et al. 2018

IJFS

View full text Add to dashboard Cite

This paper is a contribution to the ongoing debate on the benefits and drawbacks of bank revenue diversification. Revenue diversification may benefit banks if diversified activities are inherently less risky and possess high returns, while it may hurt banks if diversified activities are more risky and have low returns. Analyzing a panel dataset of 200 commercial banks from all South Asian countries, we found that overall revenue diversification into non-interest income has a positive impact on the profitability and stability of South Asian commercial banks. We further observed that different types of non-interest income-generating activities have different impacts on bank performance and stability. While fees and commission incomes have a negative impact on the profitability and stability of South Asian commercial banks, other non-interest income has a positive impact. Our results imply that banks can benefit from revenue diversification if they diversify into specific types of non-interest income-generating activities. Our findings are robust and relevant to the use of alternative measures of revenue diversification, profitability and stability.

show abstract

Section: Robustness Of Resultsmentioning

confidence: 99%

The Impact of Revenue Diversification on Bank Profitability and Stability: Empirical Evidence from South Asian Countries

Nisar

Peng

Wang

et al. 2018

IJFS

View full text Add to dashboard Cite

show abstract

“…Similarly, the deposits grew by 858.50 percent from 2000, and the overall deposits in 2014 show BDT 7928.6 billion. 1 Recent literature reports that banking practices in different countries are influenced by the national culture, legal institutions and political institutions [36][37][38][39][40][41]. Therefore, generalizing results of studies in one country for the banks in another country might be misleading sometime.…”

Section: Banking Industry Landscape In Bangladeshmentioning

confidence: 99%

Capital Regulation, the Cost of Financial Intermediation and Bank Profitability: Evidence from Bangladesh

Zheng

Rahman

Begum

et al. 2017

JRFM

Self Cite

View full text Add to dashboard Cite

Abstract:In response to the recent global financial crisis, the regulatory authorities in many countries have imposed stringent capital requirements in the form of the BASEL III Accord to ensure financial stability. On the other hand, bankers have criticized new regulation on the ground that it would enhance the cost of funds for bank borrowers and deteriorate the bank profitability. In this study, we examine the impact of capital requirements on the cost of financial intermediation and bank profitability using a panel dataset of 32 Bangladeshi banks over the period from 2000 to 2015. By employing a dynamic panel generalized method of moments (GMM) estimator, we find robust evidence that higher bank regulatory capital ratios reduce the cost of financial intermediation and increase bank profitability. The results hold when we use equity to total assets ratio as an alternative measure of bank capital. We also observe that switching from BASEL I to BASEL II has no measurable impact on the cost of financial intermediation and bank profitability in Bangladesh. In the empirical analysis, we further observe that higher bank management and cost efficiencies are associated with the lower cost of financial intermediation and higher bank profitability. These results have important implications for bank regulators, academicians, and bankers.

show abstract

“…GDP represents GDP growth rates and equals annual percentage growth in gross domestic product of a country. 3 Recent literature reports that banking practices in different countries are influenced by the national culture (Zheng and Ashraf 2014;Ashraf et al 2016b;Kanagaretnam et al 2014;, legal institutions (Houston et al 2010;Ashraf and Zheng 2015) and political institutions (Ashraf 2016. Therefore, it is important to include country-level variables in analysis.…”

Section: Authors' Ideamentioning

confidence: 99%

Impact of Cost Efficiency on Bank Capital and the Cost of Financial Intermediation: Evidence from BRICS Countries

Rahman

Ashraf

Zheng

et al. 2017

IJFS

Self Cite

View full text Add to dashboard Cite

Over last two decades, emerging and developing nations have desperately endeavored for efficient banking sectors. In this study, we argue that bank efficiency generates incentives that can impact banks' capital holdings and the cost of financial intermediation. Analyzing a panel dataset of 1190 banks from BRICS (Brazil, Russia, India, China, South Africa) countries over the period 2007-2015, we find robust evidence that more efficient banks hold higher capital and charge lower financial intermediation costs. In an extended sample over the period 2000-2015, we observe that cost efficiency had a marginal positive impact on bank capital during the global financial crisis of [2007][2008][2009]. We also observe that on average, banks increased the cost of financial intermediation during the crisis, however, greater efficiency helped banks to not charge higher intermediation costs. Our results imply the beneficial impact of bank efficiency for bank stability and real economy.

show abstract

Effects of national culture on bank risk-taking behavior

Cited by 170 publications

References 48 publications

The Impact of Revenue Diversification on Bank Profitability and Stability: Empirical Evidence from South Asian Countries

The Impact of Revenue Diversification on Bank Profitability and Stability: Empirical Evidence from South Asian Countries

Capital Regulation, the Cost of Financial Intermediation and Bank Profitability: Evidence from Bangladesh

Impact of Cost Efficiency on Bank Capital and the Cost of Financial Intermediation: Evidence from BRICS Countries

Contact Info

Product

Resources

About