Revisiting the Quiet-Life Hypothesis in the Banking Sector: Do CEOs’ Personalities Matter?

Tu D. Q. Le (), Dat T. Nguyen and Thanh Ngo
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Tu D. Q. Le: Faculty of Finance & Banking, University of Economics and Law, Ho Chi Minh City 700000, Vietnam
Dat T. Nguyen: Faculty of Finance & Banking, University of Economics and Law, Ho Chi Minh City 700000, Vietnam

IJFS, 2024, vol. 12, issue 1, 1-15

Abstract: This study investigates the relationship between market power and bank profitability, and the impacts of CEOs’ personality traits, in Vietnam from 2007 to 2020. The analysis of CEOs’ signatures is used to determine their characteristics. The findings support the quiet-life hypothesis, which suggests that the negative relationship between market power and bank profitability may depend on CEOs’ characteristics. More specifically, the results show that conscientious CEOs with market power tend to reduce bank profitability, and this effect is more pronounced for foreign-owned banks. Therefore, our findings have critical implications for bank management.

Keywords: quiet-life hypothesis; chief executive officer (CEO); personalities; Vietnamese banks; profitability; generalized method of moments (GMM) (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2024
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