Abstract
This paper empirically analyzes the role of corporate culture in banking. We define culture based on the Competing Value Framework (Quinn and Rohrbaugh, 1983) and find that banks with a more pronounced competition-oriented culture have stronger bonus-focused compensation schemes. Banks with a strong focus on growth show higher stock returns and banks with a focus on stability show lower bankruptcy risk. These findings support various theories on bank culture (Thakor, 2012; Song and Thakor, 2019) and highlight the importance of corporate culture as a ‘softer’ aspects of governance to enhance banking stability.
Original language | English |
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Pages (from-to) | 46-75 |
Number of pages | 30 |
Journal | Journal of Economic Behavior & Organization |
Volume | 186 |
DOIs | |
Publication status | Published - Jun-2021 |
Externally published | Yes |