Faculty of Economics and Business Administration Publications Database

Corporate culture and banking

Authors:
Barth, Andreas
Mansouri, Sasan
Source:
Volume: 186
Pages: 46 - 75
Month: 06
ISSN-Print: 0167-2681
Link External Source: Online Version
Year: 2021
Keywords: Corporate culture; Competing Value Framework; CEO Compensation; Stock returns; Bankruptcy risk
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.

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