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How Language Shapes Bank Risk Taking

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  • Francis OSEI-TUTU

    (LaRGE Research Center, Université de Strasbourg)

  • Laurent WEILL

    (LaRGE Research Center, Université de Strasbourg)

Abstract

We analyze the impact of language on risk-taking behavior of banks. Our hypothesis is that languages that grammatically distinguish between present and future events lead banks to take more risk. We investigate this hypothesis on a sample of 1,402 banks from 82 countries over the 2010-2017 period. We find that banks from countries with future tense marking take more risk in accordance with our prediction. This finding is robust to the inclusion of alternative culture indicators, to alternative definitions of bank risk and of future time reference.

Suggested Citation

  • Francis OSEI-TUTU & Laurent WEILL, 2019. "How Language Shapes Bank Risk Taking," Working Papers of LaRGE Research Center 2019-03, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
    • Handle: RePEc:lar:wpaper:2019-03
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    2. Kirill Antropov & Ravil Akhmadeev & Olga Yurievna Voronkova & Xenia Kotova & Svetlana Khoruzhaya & Vladimir Mikhailovich Kurikov, 2021. "Identification of corruption risks in the banking sector of the economy," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 9(2), pages 123-133, December.
    3. Caroline PERRIN & Laurent WEILL, 2021. "No Men, No Cry? How Gender Equality in Access to Credit Enhances Financial Stability," Working Papers of LaRGE Research Center 2021-02, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.

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    More about this item

    Keywords

    Banking; financial stability; language.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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