Examining the impact of employee-friendly practices on performance volatility in African banks: A textual analysis approach

IF 5.6 2区经济学 Q1 BUSINESS, FINANCE

Emerging Markets Review Pub Date : 2024-12-31 DOI:10.1016/j.ememar.2024.101250

David Adeabah , Charles Andoh , Lord Mensah

{"title":"Examining the impact of employee-friendly practices on performance volatility in African banks: A textual analysis approach","authors":"David Adeabah , Charles Andoh , Lord Mensah","doi":"10.1016/j.ememar.2024.101250","DOIUrl":null,"url":null,"abstract":"<div><div>This study examines the relationship between managerial attention to employee-friendly practices (EFPs) and performance volatility in banks. Using data from 30 public banks in four emerging African economies from 2005 to 2021, we utilize a text-based measure of managerial attention to EFPs based on keywords related to employee relations. We decompose performance volatility into inherent and residual components. The findings reveal a positive relationship between managerial attention to EFPs and inherent cashflow and earnings volatility. We also find a negative association of EFPs with residual cashflow volatility and positive association with earnings volatility. In cross-sectional analysis, we find that the positive link between managerial attention to EFPs and cashflow (earnings) volatility is more pronounced in large (small) banks, and in banks with lower levels of capital. Our results suggest that EFPs may encourage prudent liquidity risk management behavior, but greater uncertainty in equity capital levels, potentially weakening the overall soundness of banks.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"65 ","pages":"Article 101250"},"PeriodicalIF":5.6000,"publicationDate":"2024-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Emerging Markets Review","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1566014124001456","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}

引用次数: 0

Abstract

This study examines the relationship between managerial attention to employee-friendly practices (EFPs) and performance volatility in banks. Using data from 30 public banks in four emerging African economies from 2005 to 2021, we utilize a text-based measure of managerial attention to EFPs based on keywords related to employee relations. We decompose performance volatility into inherent and residual components. The findings reveal a positive relationship between managerial attention to EFPs and inherent cashflow and earnings volatility. We also find a negative association of EFPs with residual cashflow volatility and positive association with earnings volatility. In cross-sectional analysis, we find that the positive link between managerial attention to EFPs and cashflow (earnings) volatility is more pronounced in large (small) banks, and in banks with lower levels of capital. Our results suggest that EFPs may encourage prudent liquidity risk management behavior, but greater uncertainty in equity capital levels, potentially weakening the overall soundness of banks.

查看原文本刊更多论文

求助全文

约1分钟内获得全文求助全文

来源期刊

Emerging Markets Review Multiple-

CiteScore

7.10

自引率

4.20%

发文量

审稿时长

100 days

期刊介绍： The intent of the editors is to consolidate Emerging Markets Review as the premier vehicle for publishing high impact empirical and theoretical studies in emerging markets finance. Preference will be given to comparative studies that take global and regional perspectives, detailed single country studies that address critical policy issues and have significant global and regional implications, and papers that address the interactions of national and international financial architecture. We especially welcome papers that take institutional as well as financial perspectives.