Nikolaos C. Gkoumas, George N. Leledakis, Emmanouil G. Pyrgiotakis, Ion Androutsopoulos
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引用次数: 0
Abstract
We examine the association between loan portfolio concentration, competition and stock price crash risk in the US banking industry. We find that during economic downturns, banks with poorly diversified loan portfolios that operate in competitive markets are more likely to crash. Importantly, we show that this link is channelled through aggressive earnings management and ambiguous annual reports. Therefore, managerial ambiguity can serve as an early warning signal of information obfuscation, which can eventually lead to stock price crashes. As a quasi‐natural experiment, we use the passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act in 2018. This policy lowered the regulatory requirements and oversight for a specific group of large banks. The results of a difference‐in‐differences analysis support our baseline findings and add to the ongoing debate on the roots of the 2023 banking crisis. Therefore, our findings can be informative to market participants, regulators and policy makers.
期刊介绍:
The British Journal of Management provides a valuable outlet for research and scholarship on management-orientated themes and topics. It publishes articles of a multi-disciplinary and interdisciplinary nature as well as empirical research from within traditional disciplines and managerial functions. With contributions from around the globe, the journal includes articles across the full range of business and management disciplines. A subscription to British Journal of Management includes International Journal of Management Reviews, also published on behalf of the British Academy of Management.