Integration culture of global banks and the transmission of lending shocks

Andreas Barth and Deyan Radev

Journal of Banking & Finance, 2022, vol. 134, issue C

Abstract: We document that a centralization decision-making culture of global banks affects the transmission of shocks from parent banks to their subsidiaries. Using a novel measure of integration culture of multinational banking conglomerates based on the prevalence of a language of power and authority in financial reports, we find that subsidiaries of banks with a relatively more autocratic integration culture cut lending significantly more after solvency shocks to the parent company. Our result is robust to instrumenting integration culture with political and economic factors of the parent bank’s home country.

Keywords: Global banks; Corporate governance; Corporate culture; Bank integration; Shock transmission (search for similar items in EconPapers)
JEL-codes: G01 G21 G34 M14 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:134:y:2022:i:c:s0378426621002892

DOI: 10.1016/j.jbankfin.2021.106338

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