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Competition or manipulation? An empirical evidence of determinants of the earnings persistence of the U.S. banks

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journal contribution
posted on 05.02.2020 by Chi-Hsiou D Hung, Yuxiang Jiang, Hong Liu, Hong Tu
We examine the impact of competition on bank earnings persistence by exploiting a natural experiment following interstate banking deregulation that increased bank competition. We find that bank earnings adjustment speed increases after their states implement the deregulation. This relationship is weakened, however, with the increase of bank's abilities to sustain earnings, as reflected in size, diversification, managerial efficiency and safety. We further find that the impact of compeititon on bank earnings adjustment speed is direct but not indirectly through the channel of earnings management.

History

School

  • Business and Economics

Department

  • Business

Published in

Journal of Banking & Finance

Volume

88

Pages

442 - 454

Publisher

Elsevier BV

Version

AM (Accepted Manuscript)

Rights holder

© Elsevier B.V.

Publisher statement

This paper was accepted for publication in the journal Journal of Banking & Finance and the definitive published version is available at https://doi.org/10.1016/j.jbankfin.2018.01.010.

Acceptance date

17/01/2018

Publication date

2018-01-31

Copyright date

2018

ISSN

0378-4266

Language

en

Depositor

Prof Hong Liu. Deposit date: 4 February 2020

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