 Readability and banks’ risk-taking behavior: Evidence from GCCBassam M. Abu-Abbas and Mostafa K. Hassan Research in International Business and Finance, 2024, vol. 70, issue PA Abstract: We investigate the relationship between annual reports’ text readability and bank risk-taking in the Gulf Cooperation Council (GCC) countries. We find that easy-to-read annual reports are associated with a higher probability of banks’ insolvency. This finding suggests that banks with higher risks have a greater incentive to reduce information asymmetry, resulting in easy-to-read annual reports to gain the trust of the banks’ investors. The result is also attributable to the fact that GCC banks have a tight culture and formal procedures that bank managers rely upon to manage uncomfortable circumstances like risk-taking behavior. Our study findings also suggest that the traditional dynamics of market discipline theory do not effectively operate within the GCC banking environment. This might be attributed to the inadequate governance frameworks established for these financial institutions. Keywords: Annual disclosure; Text readability; Bank risk-taking; Gulf Cooperation Council (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:70:y:2024:i:pa:s0275531924001600 DOI: 10.1016/j.ribaf.2024.102367 Access Statistics for this article Research in International Business and Finance is currently edited by T. Lagoarde Segot More articles in Research in International Business and Finance from Elsevier |
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