Institutional Development and Bank Risk Taking: Evidence from Transition Economes
利用转型经济体制度改革的动态特征，采用双重差分法发现法律、银行和公司治理改革显著提升了银行金融稳定性，且对国内银行影响更大。
This paper takes advantage of the dynamic nature of institutional reforms in transition economies and explores the causal effects of those reforms on bank risk. Using a difference-in-difference approach, we show that banks’ financial stability increases substantially after these countries reform their legal institutions, liberalize banking, and restructure corporate governance. We also find that the effects of legal and governance reforms on bank risk may critically depend on the progress of banking reforms. A further examination of alternative risk measures reveals that the increases in financial stability among banks mainly come from the reduction of asset risk. Banks tend to have lower ROA volatility and fewer nonperforming loans after reforming the institutional environment. Finally, we split our sample into foreign and domestic banks and find that the enhancement of financial stability is more pronounced for domestic banks. Crown Copyright 2013 Published by Elsevier B.V. All rights reserved.