Stock market listing and the persistence of bank performance across crises

Alexandre Garel, José M. Martín-Flores and Arthur Petit-Romec

Journal of Banking & Finance, 2020, vol. 118, issue C

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.

Keywords: Bank performance; Crisis; Stock market listing; Risk-taking (search for similar items in EconPapers)
JEL-codes: G21 G23 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:118:y:2020:i:c:s0378426620301515

DOI: 10.1016/j.jbankfin.2020.105885

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