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Stock market listing and the persistence of bank performance across crises

Author

Listed:
  • Alexandre Garel

    (Audencia Business School)

  • José Martín-Flores

    (Centro Universitario de Estudios Financieros (CUNEF) - Centro Universitario de Estudios Financieros (CUNEF))

  • Arthur Petit-Romec

    (UP1 UFR02 - Université Paris 1 Panthéon-Sorbonne - École d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne, SKEMA Business School - SKEMA Business School)

Abstract

This paper examines whether stock market listing influences the persistence of bank performance across crises. We find that for both publicly and privately held banks, bank performance during the 1998 crisis is a strong predictor of bank performance during the 2007–2008 crisis. While for publicly held banks, the persistence is uniquely driven by bottom performers, for privately held banks the persistence is also driven by a group of top performers. We further show that banks that make a private-to-public transition between the two crises underperform in the 2007–08 crisis, especially if they are top performers during the 1998 crisis and more concerned about short-term stock price. We also document that after making a private-to-public transition, banks increase risk in a way that makes them more vulnerable to crises.

Suggested Citation

  • Alexandre Garel & José Martín-Flores & Arthur Petit-Romec, 2020. "Stock market listing and the persistence of bank performance across crises," Post-Print hal-02903379, HAL.
    • Handle: RePEc:hal:journl:hal-02903379
    DOI: 10.1016/j.jbankfin.2020.105885
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    Cited by:

    1. Sirong Luo & Radha Mookerjee & Dengpan Liu, 2021. "The Effects of Auction‐based Pricing Mechanisms and Social Characteristics on Microloan Performance," Production and Operations Management, Production and Operations Management Society, vol. 30(2), pages 311-329, February.

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