Internationalization and Bank Risk

• 成果类型: Article
• 署名作者: Berger, Allen N.; El Ghoul, Sadok; Guedhami, Omrane; Roman, Raluca A.
• 署名单位: University of South Carolina System; University of South Carolina Columbia; University of Pennsylvania; University of Alberta; Federal Reserve System - USA; Federal Reserve Bank - Kansas City
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2016.2422
• 发表日期: 2017
• 页码: 2283-2301
• 关键词: risk; INTERNATIONALIZATION; banking; financial crises; corporate governance

摘要

This paper documents a positive relation between internationalization and bank risk. This is consistent with the empirical dominance of the market risk hypothesis, whereby internationalization increases banks' risk due to market-specific factors in foreign markets, over the diversification hypothesis, whereby internationalization allows banks to reduce risk through diversification of their operations. The results continue to hold following a variety of robustness tests, including those for endogeneity and sample selection bias. We also find that the magnitude of this effect is more pronounced during financial crises. The results appear to be at least partially explained by agency problems related to poor corporate governance.