Relevance of size in predicting bank failures

Basim Alzugaiby, Jairaj Gupta, Andrew Mullineux and Rizwan Ahmed

International Journal of Finance & Economics, 2021, vol. 26, issue 3, 3504-3543

Abstract: Employing a statistical model‐building strategy, this study aims to analyse the United States' bank failures across different size categories (small, medium, and large). Our results suggest that factors associated with bank failures vary across respective size categories, and the average marginal effects (AMEs) of mutually significant covariates also exhibit significant variability across different size classes of banks. The results are robust to up‐to 3 years of lagged regression estimates, various control variables, interaction between bank size and bank charter, alternative bank size classifications, and macroeconomic crisis periods.

Date: 2021
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https://doi.org/10.1002/ijfe.1973

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Persistent link: https://EconPapers.repec.org/RePEc:wly:ijfiec:v:26:y:2021:i:3:p:3504-3543

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