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An empirical analysis of the relation between bank charter value and risk taking

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  • Niu, Jijun
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    Abstract

    This paper examines the relation between bank charter value and risk taking. Using a sample of U.S. banks over the period 1990–2006, we find that the relation is U-shaped: as charter value increases, risk taking first decreases and then increases. This finding is robust across alternative measures of risk taking and an estimation method that accounts for the joint determination of charter value and risk taking.

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    Bibliographic Info

    Article provided by Elsevier in its journal The Quarterly Review of Economics and Finance.

    Volume (Year): 52 (2012)
    Issue (Month): 3 ()
    Pages: 298-304

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    Handle: RePEc:eee:quaeco:v:52:y:2012:i:3:p:298-304

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    Web page: http://www.elsevier.com/locate/inca/620167

    Related research

    Keywords: Bank; Charter value; Risk taking;

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    Cited by:
    1. Stefan Arping, 2014. "Does Competition make Banks more Risk-seeking?," Tinbergen Institute Discussion Papers 14-059/IV, Tinbergen Institute.

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