Journal article
Economic uncertainty and bank risk: Evidence from emerging economies
Journal of international financial markets, institutions & money, v 68, 101242
Sep 2020
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
•This paper examines the impact of economic uncertainty on the risk of banks.•We use bank-level panel data of 1500 banks in 34 emerging economies during 2000–2016.•We find consistent evidence that bank risk increases as economic uncertainty increases.•We also investigate mechanisms whereby uncertainty is translated into bank risk.
This paper examines the impact of economic uncertainty on the risk of banks, which has only been underexplored in extant literature so far. Using bank-level panel data of more than 1500 banks in 34 emerging economies during the period of 2000–2016, we find consistent and robust evidence that bank risk increases as the level of economic uncertainty increases. We also investigate possible mechanisms whereby economic uncertainty is translated into bank risk, and present evidence that the uncertainty-bank risk nexus is more attributable to the option value of waiting, search-for-yield strategies and bank herding behaviors than various demand-side effects.
Metrics
Details
- Title
- Economic uncertainty and bank risk: Evidence from emerging economies
- Creators
- Ji Wu - Southwestern University of Finance and EconomicsYao Yao - Southwestern University of Finance and EconomicsMinghua Chen - Southwestern University of Finance and EconomicsBang Nam Jeon - Drexel University
- Publication Details
- Journal of international financial markets, institutions & money, v 68, 101242
- Publisher
- Elsevier
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:000573642000006
- Scopus ID
- 2-s2.0-85089469333
- Other Identifier
- 991019330619904721
UN Sustainable Development Goals (SDGs)
This publication has contributed to the advancement of the following goals:
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business, Finance
- Economics