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The effect of individualism on bank risk and bank Performance: An international study

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  • Jin, Yi
  • Gao, Xin
  • Li, Donghui

Abstract

Employing an international sample of banks spanning 2009 to 2018, this paper investigates the effect of individualism on bank risk. We find that individualism is negatively associated with bank risk. We then find that managers’ (individual) risk preference as internal corporate governance and bank regulation as external corporate governance exhibit a mediation effect in explaining the relationship between individualism and bank risk. We further test the effect of individualism on bank performance, including bank efficiency and profitability. Our baseline results remain valid after carefully considering various robustness tests and endogeneity concerns.

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  • Jin, Yi & Gao, Xin & Li, Donghui, 2022. "The effect of individualism on bank risk and bank Performance: An international study," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:intfin:v:80:y:2022:i:c:s1042443122001081
    DOI: 10.1016/j.intfin.2022.101634
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