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The Market Survival of Publicly Traded Traditional and Market-Based Financial Intermediaries

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  • Marc Schaffer

Abstract

The financial crisis highlighted the pivotal role that financial intermediaries play in the economy. Recent research has analyzed the differences between traditional and market-based financial intermediaries, noting the greater balance sheet volatility of the former category. Using these volatility differences as a basis, this paper compares the stock market delisting behavior of market-based and traditional financial intermediaries. Using survival analysis, I find that market-based intermediaries carry greater cumulative incidence of stock market delisting due to firm failure and M&A activity relative to traditional intermediaries. Additionally, idiosyncratic risk plays an important role in the survival behavior across these institutional structures.

Suggested Citation

  • Marc Schaffer, 2015. "The Market Survival of Publicly Traded Traditional and Market-Based Financial Intermediaries," Applied Economics and Finance, Redfame publishing, vol. 2(2), pages 52-67, May.
    • Handle: RePEc:rfa:aefjnl:v:2:y:2015:i:2:p:52-67
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    More about this item

    Keywords

    financial intermediation; survival analysis; idiosyncratic risk; banks; delisting; M&A;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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