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Corporate culture and banking

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  • Barth, Andreas
  • Mansouri, Sasan

Abstract

This paper empirically analyzes the role of corporate culture in banking. We define culture based on the Competing Value Framework (Quinn and Rohrbaugh, 1983) and find that banks with a more pronounced competition-oriented culture have stronger bonus-focused compensation schemes. Banks with a strong focus on growth show higher stock returns and banks with a focus on stability show lower bankruptcy risk. These findings support various theories on bank culture (Thakor, 2012; Song and Thakor, 2019) and highlight the importance of corporate culture as a ‘softer’ aspects of governance to enhance banking stability.

Suggested Citation

  • Barth, Andreas & Mansouri, Sasan, 2021. "Corporate culture and banking," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 46-75.
    • Handle: RePEc:eee:jeborg:v:186:y:2021:i:c:p:46-75
    DOI: 10.1016/j.jebo.2021.02.010
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    References listed on IDEAS

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    Cited by:

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    2. Barth, Andreas & Radev, Deyan, 2022. "Integration culture of global banks and the transmission of lending shocks," Journal of Banking & Finance, Elsevier, vol. 134(C).
    3. Hertel, Tobias & Kaya, Devrimi & Reichmann, Doron, 2024. "Corporate culture and M&A deals: Using text from crowdsourced employer reviews to measure cultural differences," Journal of Banking & Finance, Elsevier, vol. 161(C).
    4. Hasan, Iftekhar & Jackowicz, Krzysztof & Kowalewski, Oskar & Kozłowski, Łukasz, 2023. "Cultural values of parent bank board members and lending by foreign subsidiaries: The moderating role of personal traits," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 83(C).
    5. Stieglitz, Moritz & Wagner, Konstantin, 2020. "Marginal returns to talent for material risk takers in banking," IWH Discussion Papers 20/2020, Halle Institute for Economic Research (IWH).
    6. Thi Nguyen, Loan Quynh & Matousek, Roman & Muradoglu, Gulnur, 2024. "Bank capital, liquidity creation and the moderating role of bank culture: An investigation using a machine learning approach," Journal of Financial Stability, Elsevier, vol. 72(C).
    7. Muhammad Donal Mon & Cut Tiffanny Ferina, 2024. "Analysis of the Influence of Organizational Appearance, Corporate Culture, and Service Quality on Employee Performance Mediated by Enviromental Performance of Retail Employees in Batam City," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(1), pages 2309-2317, January.

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    More about this item

    Keywords

    Corporate culture; Competing Value Framework; CEO Compensation; Stock returns; Bankruptcy risk;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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