Influence of National Culture on Bank Risk-taking in the European System

Candida Bussoli ()
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Candida Bussoli: LUM Jean Monnet University

Chapter Chapter 10 in Risk Culture in Banking, 2017, pp 215-239 from Palgrave Macmillan

Abstract: Abstract This chapter focuses on the relevance of national culture in bank risk-taking decisions. The analysis considers the European banking system and aims to study how different cultural values across countries may affect bank risk-taking. Using firm-level data from 28 EU countries and employing an OLS analysis, we show that individualism has a positive association with bank risk-taking and uncertainty avoidance has a negative association with bank risk-taking. We also find that the large dimension of banks weakens the association of culture with bank risk-taking. The empirical evidence reveals that even in the highly globalized European financial system, with uniform rules of supervision and risk management across countries and in crises times, culture matters.

Keywords: Bank; National culture; Bank risk-taking; Uncertainty avoidance; Individualism (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-319-57592-6_10

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DOI: 10.1007/978-3-319-57592-6_10

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