Nexus between bank capital and risk-taking behaviour: Empirical evidence from US commercial banks

References

• Abbas, F., & Ali, S. (2020). Dynamics of bank capital ratios and risk-taking: Evidence from US commercial banks. Cogent Economics & Finance, 8(1), 1838693. https://doi.org/https://doi.org/10.1080/23322039.2020
   Google Scholar
• Abbas, F., Ali, S., & Rubbaniy, G. (2021a). Economics of capital adjustment in the US commercial banks: Empirical analysis. Journal of Applied Economics, 24(1), 71–17. https://doi.org/https://doi.org/10.1080/15140326.2021.1881877
   Google Scholar
• Abbas, F., Batool, N., & Sulehri, F. A. (2020). Investment, financial, trade freedom and risk-taking: Empirical evidence from USA‎. Studies of Applied Economics, 39(2). https://doi.org/http://doi.org/10.25115/eea.v39i2.3736
   Google Scholar
• Abbas, F., & Masood, O. (2020a). How banks adjust capital ratios: The most recent empirical facts. Quantitative Finance and Economics, 4(3), 412. https://doi.org/https://doi.org/10.3934/QFE.2020019
   Google Scholar
• Abbas, F., & Masood, O. (2020b). How do large commercial banks adjust capital ratios: Empirical evidence from the US? Economic Research-Ekonomska Istraživanja, 33(1), 1849–1866. https://doi.org/https://doi.org/10.1080/1331677X.2020.1763823
   Google Scholar
• Abbas, F., Masood, O., Ali, S., & Rizwan, S. (2021c). How do capital ratios affect bank risk-taking: New evidence from the United States. SAGE Open, 11(1), 2158244020979678. https://doi.org/https://doi.org/10.1177/2158244020979678
   Google Scholar
• Abbas, F., Rubbaniy, G., & Ali, S. (2021b). Income and balance sheet diversification effects on banks’ cost and profit efficiency: Evidence from the US. Available at SSRN 3808379.
   Google Scholar
• Abbas, F., Yousaf, I., Ali, S., & Wong, W. K. (2021d). Bank capital buffer and economic growth: New insights from the US banking sector. Journal of Risk and Financial Management, 14(4), 142. https://doi.org/https://doi.org/10.3390/jrfm14040142
   Google Scholar
• Aggarwal, R., & Jacques, K. T. (1998). Assessing the impact of prompt corrective action on bank capital and risk. Economic Policy Review, 4(3)
   Google Scholar
• Ali, S., Shah, S. Z. A., & Chughtai, S. (2019). The role of bank competition in influencing bank liquidity creation: Evidence from China. Journal of Business & Economics, 11(1), 21–34.
   Google Scholar
• Ali, S., Yousaf, I., & Naveed, M. (2020). Role of credit rating in determining capital structure: Evidence from non-financial sector of Pakistan. Studies of Applied Economics, 38(3), 3. https://doi.org/https://doi.org/10.25115/eea.v38i3.3066
   Google Scholar
• Altunbas, Y., Carbo, S., Gardener, E. P., & Molyneux, P. (2007). Examining the relationships between capital, risk and efficiency in European banking. European Financial Management, 13(1), 49–70. https://doi.org/https://doi.org/10.1111/j.1468-036X.2006.00285.x
   Google Scholar
• Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 277–297. https://doi.org/https://doi.org/10.2307/2297968
   Google Scholar
• Athanasoglou, P. (2011). Bank capital and risk in the South Eastern European region. University Library of Munich, Germany
   Google Scholar
• Bitar, M., Pukthuanthong, K., & Walker, T. (2018). The effect of capital ratios on the risk, efficiency and profitability of banks: Evidence from OECD countries. Journal of International Financial Markets, Institutions and Money, 53, 227–262. https://doi.org/https://doi.org/10.1016/j.intfin.2017.12.002
   Google Scholar
• Blum, J. (1999). Do capital adequacy requirements reduce risks in banking? Journal of Banking & Finance, 23(5), 755–771. https://doi.org/https://doi.org/10.1016/S0378-4266(98)00113-7
   Google Scholar
• Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115–143. https://doi.org/https://doi.org/10.1016/S0304-4076(98)00009-8
   Google Scholar
• Borio, C., & Zhu, H. (2012). Capital regulation, risk-taking and monetary policy: A missing link in the transmission mechanism? Journal of Financial Stability, 8(4), 236–251. https://doi.org/https://doi.org/10.1016/j.jfs.2011.12.003
   Google Scholar
• Dalla Palma, L., Grisi, G., Cuttin, R., & Rimondini, A. (1999). Digital vs conventional radiography: Cost and revenue analysis. European Radiology, 9(8), 1682–1692. https://doi.org/https://doi.org/10.1007/s003300050910
   Google Scholar
• Ding, D., & Sickles, R. C. (2018). Frontier efficiency, capital structure, and portfolio risk: An empirical analysis of US banks. BRQ Business Research Quarterly, 21(4), 262–277. https://doi.org/https://doi.org/10.1016/j.brq.2018.09.002
   Google Scholar
• Ding, D., & Sickles, R. C. (2019). Capital Regulation, Efficiency, and Risk Taking: A Spatial Panel Analysis of US Banks. Panel Data Econometrics: Empirical Applications, 405.
   Google Scholar
• El-Khoury, R. (2020). Regulation, bank capital, and bank risk: evidence from the Lebanese banking industry. Journal of Banking Regulation, 21(3), 241–255. https://doi.org/https://doi.org/10.1057/s41261-019-00111–2
   Google Scholar
• Fiordelisi, F., Marques-Ibanez, D., & Molyneux, P. (2011). Efficiency and risk in European banking. Journal of Banking & Finance, 35(5), 1315–1326. https://doi.org/https://doi.org/10.1016/j.jbankfin.2010.10.005
   Google Scholar
• Godlewski, C. J. (2005). Bank capital and credit risk taking in emerging market economies. Journal of Banking Regulation, 6(2), 128–145. https://doi.org/https://doi.org/10.1057/palgrave.jbr.2340187
   Google Scholar
• Hua, W. (2011). The capital and risk adjustment under regulatory pressure of Chinese commercial banks. Management Science and Engineering, 5(4), 41. https://doi.org/http://doi.org/10.3968/j.mse.1913035X20110504.z1911
   Google Scholar
• Jacques, K., & Nigro, P. (1997). Risk-based capital, portfolio risk, and bank capital: A simultaneous equations approach. Journal of Economics and Business, 49(6), 533–547. https://doi.org/https://doi.org/10.1016/S0148-6195(97)00038-6
   Google Scholar
• Jahankhani, A., & Lynge, M. J. (1979). Commercial bank financial policies and their impact on market-determined measures of risk/BEBR No. 556. Faculty working papers; no. 556.
   Google Scholar
• Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/https://doi.org/10.1016/0304-405X(76)90026-X
   Google Scholar
• Jiang, H., Zhang, J., & Sun, C. (2019). How does capital buffer affect bank risk-taking? New evidence from China using quantile regression. China Economic Review, 60, 101300. https://doi.org/https://doi.org/10.1016/j.chieco.2019.04.008
   Google Scholar
• Jokipii, T., & Milne, A. (2011). Bank capital buffer and risk adjustment decisions. Journal of Financial Stability, 7(3), 165–178. https://doi.org/https://doi.org/10.1016/j.jfs.2010.02.002
   Google Scholar
• Kahane, Y. (1977). Capital adequacy and the regulation of financial intermediaries. Journal of Banking & Finance, 1(2), 207–218. https://doi.org/https://doi.org/10.1016/0378-4266(77)90007-3
   Google Scholar
• Keeley, M. C., & Furlong, F. T. (1990). A reexamination of mean-variance analysis of bank capital regulation. Journal of Banking & Finance, 14(1), 69–84. https://doi.org/https://doi.org/10.1016/0378-4266(90)90036-2
   Google Scholar
• Kim, D., & Santomero, A. M. (1988). Risk in banking and capital regulation. The Journal of Finance, 43(5), 1219–1233. https://doi.org/https://doi.org/10.1111/j.1540-6261.1988.tb03966.x
   Google Scholar
• Koehn, M., & Santomero, A. M. (1980). Regulation of bank capital and portfolio risk. The Journal of Finance, 35(5), 1235–1244. https://doi.org/https://doi.org/10.1111/j.1540-6261.1980.tb02206.x
   Google Scholar
• Lee, C. C., & Hsieh, M. F. (2013). The impact of bank capital on profitability and risk in Asian banking. Journal of International Money and Finance, 32, 251–281. https://doi.org/https://doi.org/10.1016/j.jimonfin.2012.04.013
   Google Scholar
• Maji, S. G., & Hazarika, P. (2016). Bank capital and risk adjustment decision in emerging markets: The case of India. International Journal of Financial Services Management, 8(3), 272–289. https://doi.org/https://doi.org/10.1504/IJFSM.2016.080120
   Google Scholar
• Memmel, C., & Raupach, P. (2010). How do banks adjust their capital ratios?. Journal of Financial Intermediation, 19(4), 509–528. https://doi.org/https://doi.org/10.1016/j.jfi.2009.10.002
   Google Scholar
• Mirzaei, A. (2011). The effect of market power on stability and performance of Islamic and conventional banks. Islamic Economic Studies, 18(1)
   Google Scholar
• Molyneux, P. (2018). Developments in banking research and areas for future study. International Journal of the Economics of Business, 25(1), 167–179. https://doi.org/https://doi.org/10.1080/13571516.2017.1399654
   Google Scholar
• Mongid, A., Tahir, I. M., & Haron, S. (2012). The relationship between inefficiency, risk and capital evidence from commercial banks in ASEAN. UNIVERSITI PUTRA MALAYSIA.
   Google Scholar
• Pettway, R. H. (1976). Market tests of capital adequacy of large commercial banks. The Journal of Finance, 31(3), 865–875. https://doi.org/https://doi.org/10.1111/j.1540-6261.1976.tb01929.x
   Google Scholar
• Rochet, J.-C. (1992). Capital requirements and the behaviour of commercial banks. European Economic Review, 36(5), 1137–1170. https://doi.org/https://doi.org/10.1016/0014-2921(92)90051-W
   Google Scholar
• Sealey, C. W., Jr. (1983). Valuation, capital structure, and shareholder unanimity for depository financial intermediaries. The Journal of Finance, 38(3), 857–871. https://doi.org/https://doi.org/10.1111/j.1540-6261.1983.tb02506.x
   Google Scholar
• Shim, J. (2010). Capital-based regulation, portfolio risk and capital determination: Empirical evidence from the US property–liability insurers. Journal of Banking & Finance, 34(10), 2450–2461. https://doi.org/https://doi.org/10.1016/j.jbankfin.2010.04.003
   Google Scholar
• Shim, J. (2013). Bank capital buffer and portfolio risk: The influence of business cycle and revenue diversification. Journal of Banking & Finance, 37(3), 761–772. https://doi.org/https://doi.org/10.1016/j.jbankfin.2012.10.002
   Google Scholar
• Shrieves, R. E., & Dahl, D. (1992). The relationship between risk and capital in commercial banks. Journal of Banking & Finance, 16(2), 439–457. https://doi.org/https://doi.org/10.1016/0378-4266(92)90024-T
   Google Scholar
• Tan, Y. (2016). The impacts of risk and competition on bank profitability in China. Journal of International Financial Markets, Institutions and Money, 40, 85–110. https://doi.org/https://doi.org/10.1016/j.intfin.2015.09.003
   Google Scholar
• Tan, Y., & Floros, C. (2013). Risk, capital and efficiency in Chinese banking. Journal of International Financial Markets, Institutions and Money, 26, 378–393. https://doi.org/https://doi.org/10.1016/j.intfin.2013.07.009
   Google Scholar
• Teply, P., & Matejašák, M. (2007). Regulation of bank capital and behavior of banks: Assessing the US and the EU-15 region banks in the 2000-2005 period. Retrieved from.
   Google Scholar
• Tran, V. T., Lin, C. T., & Nguyen, H. (2016). Liquidity creation, regulatory capital, and bank profitability. International Review of Financial Analysis, 48, 98–109. https://doi.org/https://doi.org/10.1016/j.irfa.2016.09.010
   Google Scholar
• Ugwuanyi, G. O. (2015). Regulation of bank capital requirements and bank risk-taking behaviour: Evidence from the Nigerian banking industry. International Journal of Economics and Finance, 7(8), 31–37. https://doi.org/https://doi.org/10.5539/ijef.v7n8p31
   Google Scholar
• Windmeijer, F. (2005). A finite sample correction for the variance of linear efficient two-step GMM estimators. Journal of Econometrics, 126(1), 25–51. https://doi.org/https://doi.org/10.1016/j.jeconom.2004.02.005
   Google Scholar
• Yousaf, I., Ali, S., & Hasan, A. (2019a). Effect of family control on corporate financing decisions of firms: Evidence from Pakistan. Studies of Applied Economics, 37(3), 155–170. https://doi.org/https://doi.org/10.25115/eea.v37i3.2779
   Google Scholar
• Yousaf, I., Ali, S., & Hassan, A. (2019b). Effect of family control on corporate dividend policy of firms in Pakistan. Financial Innovation, 5(1), 1–13. https://doi.org/https://doi.org/10.1186/s40854-019-0158-9
   Google Scholar
• Zhang, Z.-Y., Jun, W., & Liu, Q.-F. (2008). Impacts of capital adequacy regulation on risk-taking behaviors of banking. Systems Engineering-Theory & Practice, 28(8), 183–189. https://doi.org/https://doi.org/10.1016/S1874-8651(09)60035-1
   Google Scholar