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Pour, Eilnaz Kashefi, Uddin, Moshfique, Murinde, Victor and Amini, Shima (2023) 'CEO power, bank risk-taking and national culture: International evidence.' Journal of Financial Stability, 67. p. 101133.

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Abstract

Using unique hand-collected data for 336 large banks across 48 countries, together with values of national culture, our empirical analysis uncovers three new robust findings. First, variations of bank risk-taking across national culture and CEO power are more pronounced when cultural values and CEO power indicators are high. Second, while the individualism dimension of national culture has a moderating influence, the uncertainty avoidance dimension has a reinforcing effect, on the relationship between CEO power and bank risk-taking. In more detail, the results for the average marginal effect of CEO power on risk for different cultural values show that CEO power has a negative (positive) or insignificant impact on bank risk-taking when the value of individualism (uncertainty avoidance) is low; however, the impact becomes positive (negative) and statistically significant as the value of individualism (uncertainty avoidance) increases. Third, intra-cultural diversity matters: ‘tight’ cultures (e.g., strong social norms) are more pronounced than ‘loose’ cultures (e.g., heterogeneous values) in influencing bank risk.

Item Type: Journal Article
Keywords: National culture, Individualism, Uncertainty avoidance, Bank risk-taking, CEO power, Hierarchical linear modeling
SOAS Departments & Centres: Departments and Subunits > School of Finance & Management
ISSN: 15723089
DOI (Digital Object Identifier): https://doi.org/10.1016/j.jfs.2023.101133
SWORD Depositor: JISC Publications Router
Date Deposited: 03 Jul 2023 08:05
URI: https://eprints.soas.ac.uk/id/eprint/39670
Funders: Other, Other, Economic and Social Research Council, Other

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