Earnings management and bank funding

Van Dan Dang and Hoang Chung Nguyen

Global Business and Economics Review, 2024, vol. 30, issue 1, 72-92

Abstract: This paper investigates the impact of earnings management on bank funding. Using a sample of Vietnamese commercial banks between 2007 and 2019, we reveal that greater earnings opacity of banks causes a significant drop in total bank funding. When decomposing total funding into its components, we find that wholesale funds are the primary driver of the result, while no significant effect of earnings manipulation on retail deposits is documented. Further analyses on bank heterogeneity indicate that the unfavourable impact of earnings opacity on banks' wholesale funds is less pronounced for banks that are better capitalised, more liquid, larger in size, more profitable, and less risky. Through this consistent pattern, we can conclude that the financial strength of banks may alleviate the adverse effect of earnings opacity on bank funding. Our findings firmly survive after a series of robustness tests.

Keywords: bank funding; discretionary loan loss provisions; earnings opacity; retail deposits; wholesale funds. (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.inderscience.com/link.php?id=135288 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:gbusec:v:30:y:2024:i:1:p:72-92

Access Statistics for this article

More articles in Global Business and Economics Review from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().