Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/172510
Authors: 
Lyócsa, Štefan
Výrost, Tomáš
Baumöhl, Eduard
Year of Publication: 
2018
Abstract: 
We test a sample of 3,586 banks from 33 European countries to determine whether performances above or below a social aspiration level (median performance of peer banks) influence banks’ aggregate risk levels. Our results are consistent with the behavioral theory of the firm and prospect theory in that we find that bank performance below a bank’s social aspiration level is followed by increased aggregate risk, i.e., risk-taking behavior in the subsequent year. Although under-performing banks tend to be risk-takers, large banks and banks with high aggregate risk levels tend to limit the increase in their aggregate risk levels.
Subjects: 
social aspiration
European banks
performance
risk behavior
prospect theory
JEL: 
D22
G2
G41
L22
L25
Document Type: 
Preprint

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.