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- Title
The impact of organizational culture on bank stability.
- Authors
Luu, Hiep Ngoc; Nguyen, Lan Thi Mai; Vu, Kieu Trang; Nguyen, Loan Quynh Thi
- Abstract
This paper examines the impact of organizational culture on bank stability. We rely on the Competing Values Framework (CVF) to identify the four cultural dimensions of banks, namely Control, Collaborate, Compete and Create cultures. Using the textual analysis technique and banks' annual reports, we obtain organizational culture values in conjunction with the CVF for a large sample of US-listed banks from 1994 to 2020. We find that banks with cultures leaning toward consistency, monitoring, and control practices (i.e., Control-oriented and Compete-oriented cultures) exhibit a higher level of stability. Additional analyses show that Control-oriented banks have higher asset quality and are less risky, whereas Compete-oriented banks have higher asset quality and better financial performance. We also find that the impact of culture on bank stability is more pronounced during "non-crisis" periods and is more prominent for small and medium-sized banks.
- Subjects
CORPORATE culture; CORPORATION reports; CONTENT analysis; FINANCIAL performance; BANKING industry; BANK management
- Publication
Review of Quantitative Finance & Accounting, 2023, Vol 61, Issue 2, p501
- ISSN
0924-865X
- Publication type
Article
- DOI
10.1007/s11156-023-01155-2