In:
Journal of Financial and Quantitative Analysis, Cambridge University Press (CUP), Vol. 54, No. 1 ( 2019-02), p. 275-301
Abstract:
We study the relationship between societal trust and risk-taking in the banking industry. Prior literature has found that societal trust is positively related to both financial reporting conservatism and financial reporting transparency, which reduce bank managers’ ability to take excessive risk. Additionally, bank managers in high-trust countries are more likely to exhibit higher pro-social behavior and, therefore, less likely to take excessive risk for personal benefit. Consistent with these arguments, we document that banks in countries with higher societal trust exhibit lower risk-taking and that these banks also experienced less financial trouble and fewer failures during the 2007–2009 financial crisis.
Type of Medium:
Online Resource
ISSN:
0022-1090
,
1756-6916
DOI:
10.1017/S0022109018000455
Language:
English
Publisher:
Cambridge University Press (CUP)
Publication Date:
2019
detail.hit.zdb_id:
2010249-5
detail.hit.zdb_id:
219406-5
SSG:
3,2
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