Effects of informal institutions on the relationship between accounting measures of risk and bank distress
We investigate the effects of informal institutions (trust, religiosity and the media) on the relationship between accounting-based risk measures and bank distress. We conduct our analysis in two stages. In the first stage, we extend the prior literature by documenting a link between accounting-base...
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2017
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sg-smu-ink.soa_research-26742018-04-04T09:55:11Z Effects of informal institutions on the relationship between accounting measures of risk and bank distress KANAGARETNAM, Kiridaran LEE, Jimmy LIM, Chee Yeow LOBO, Gerald J. We investigate the effects of informal institutions (trust, religiosity and the media) on the relationship between accounting-based risk measures and bank distress. We conduct our analysis in two stages. In the first stage, we extend the prior literature by documenting a link between accounting-based risk measures and bank distress during the 2008-2009 financial crisis. In particular, given the environment characterized by rapid growth in financial innovation and complex financial transactions prior to the crisis, simple accounting-based risk measures continue to predict bank distress during this crisis period. In the second stage, we address our main research question related to the effects of selected informal institutions (societal trust, religiosity, and the media) in enhancing the predictive ability of accounting-based risk measures. As hypothesized, we find that these informal institutions enhance the predictive ability of accounting-based risk measures. Our results inform regulators that the focus on strengthening formal institutions should not ignore country-specific informal institutional structures. 2017-07-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/soa_research/1647 info:doi/10.2308/jiar-51827 https://ink.library.smu.edu.sg/context/soa_research/article/2674/viewcontent/AccountingMeasuresRiskBankDistress_2017.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Accountancy eng Institutional Knowledge at Singapore Management University Informal institutions Accounting-based risk measures Trust Religion Media Bank failure Bank financial trouble Financial crisis Accounting Finance and Financial Management |
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Informal institutions Accounting-based risk measures Trust Religion Media Bank failure Bank financial trouble Financial crisis Accounting Finance and Financial Management KANAGARETNAM, Kiridaran LEE, Jimmy LIM, Chee Yeow LOBO, Gerald J. Effects of informal institutions on the relationship between accounting measures of risk and bank distress |
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We investigate the effects of informal institutions (trust, religiosity and the media) on the relationship between accounting-based risk measures and bank distress. We conduct our analysis in two stages. In the first stage, we extend the prior literature by documenting a link between accounting-based risk measures and bank distress during the 2008-2009 financial crisis. In particular, given the environment characterized by rapid growth in financial innovation and complex financial transactions prior to the crisis, simple accounting-based risk measures continue to predict bank distress during this crisis period. In the second stage, we address our main research question related to the effects of selected informal institutions (societal trust, religiosity, and the media) in enhancing the predictive ability of accounting-based risk measures. As hypothesized, we find that these informal institutions enhance the predictive ability of accounting-based risk measures. Our results inform regulators that the focus on strengthening formal institutions should not ignore country-specific informal institutional structures. |
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text |
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KANAGARETNAM, Kiridaran LEE, Jimmy LIM, Chee Yeow LOBO, Gerald J. |
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KANAGARETNAM, Kiridaran LEE, Jimmy LIM, Chee Yeow LOBO, Gerald J. |
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KANAGARETNAM, Kiridaran |
title |
Effects of informal institutions on the relationship between accounting measures of risk and bank distress |
title_short |
Effects of informal institutions on the relationship between accounting measures of risk and bank distress |
title_full |
Effects of informal institutions on the relationship between accounting measures of risk and bank distress |
title_fullStr |
Effects of informal institutions on the relationship between accounting measures of risk and bank distress |
title_full_unstemmed |
Effects of informal institutions on the relationship between accounting measures of risk and bank distress |
title_sort |
effects of informal institutions on the relationship between accounting measures of risk and bank distress |
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Institutional Knowledge at Singapore Management University |
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2017 |
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https://ink.library.smu.edu.sg/soa_research/1647 https://ink.library.smu.edu.sg/context/soa_research/article/2674/viewcontent/AccountingMeasuresRiskBankDistress_2017.pdf |
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