Bank earnings persistence.pdf (610.15 kB)
Competition or manipulation? An empirical evidence of determinants of the earnings persistence of the U.S. banks
journal contributionposted on 2020-02-05, 09:52 authored by Chi-Hsiou D Hung, Yuxiang Jiang, Hong LiuHong 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.
- Business and Economics
Published inJournal of Banking & Finance
Pages442 - 454
- AM (Accepted Manuscript)
Rights holder© Elsevier B.V.
Publisher statementThis 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.