National culture and banks stock volatility

Koresh Galil and Eva Varon

Journal of International Financial Markets, Institutions and Money, 2024, vol. 91, issue C

Abstract: We conduct a cross-country analysis to examine the impact of national culture on the vulnerability of European banks during the Covid-19 pandemic. Analyzing the stock market volatility of major banks, we explore differences in uncertainty avoidance and individualism levels across multiple European countries. Our results reveal that low uncertainty avoidance reduces the influence of Covid-19-related cases on bank volatility during the peak of the crisis. Even as the pandemic progresses and vaccinations become widespread, the effect of uncertainty avoidance remains significant. We also find that high individualism has a stabilizing effect on bank volatility, particularly after the start of vaccinations. This study contributes to understanding the role of national culture in shaping bank vulnerability to common stocks, such as the pandemic.

Keywords: Banks; Stocks volatility; National culture; Covid-19; Uncertainty avoidance; Individualism (search for similar items in EconPapers)
JEL-codes: G12 G21 Z10 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:91:y:2024:i:c:s1042443123002007

DOI: 10.1016/j.intfin.2023.101932

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