Corporate Culture and Banking

49 Pages Posted: 23 Dec 2015 Last revised: 17 Jun 2018

See all articles by Andreas Barth

Andreas Barth

Goethe University Frankfurt - Department of Finance; Halle Institute for Economic Research; Saarland University

Sasan Mansouri

University of Groningen - Faculty of Economics and Business; Goethe University Frankfurt; Halle Institute for Economic Research

Date Written: January 12, 2016

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-focussed compensation schemes, while banks with a strong focus on creativity show higher bankruptcy risk. These findings suggest that risk management practices are not merely driven by incentives from compensation schemes, but rather driven by differences in corporate culture.

Keywords: corporate culture; Competing Value Framework; CEO compensation; stock returns; bankruptcy risk.

JEL Classification: G21, G34, M14

Suggested Citation

Barth, Andreas and Mansouri, Sasan, Corporate Culture and Banking (January 12, 2016). Available at SSRN: https://ssrn.com/abstract=2707078 or http://dx.doi.org/10.2139/ssrn.2707078

Andreas Barth (Contact Author)

Goethe University Frankfurt - Department of Finance ( email )

Theodor-W.-Adorno-Platz 3
Frankfurt, 60629
Germany

Halle Institute for Economic Research ( email )

P.O. Box 11 03 61
Kleine Maerkerstrasse 8
D-06017 Halle, 06108
Germany

Saarland University ( email )

Stadtwald
Saarbrucken, Saarland D-66123
Germany

Sasan Mansouri

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

Goethe University Frankfurt ( email )

Frankfurt am Main
Germany
015781284258 (Phone)

HOME PAGE: http://www.sasanm.de

Halle Institute for Economic Research

P.O. Box 11 03 61
Kleine Maerkerstrasse 8
D-06017 Halle, 06108
Germany

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