Social aspirations in European banks: peer-influenced risk behaviour.

LYÓCSA, Štefan, Tomáš VÝROST and Eduard BAUMÖHL. Social aspirations in European banks: peer-influenced risk behaviour. Applied Economics Letters. UK: Taylor & Francis, 2019, vol. 26, No 6, p. 473-479. ISSN 1350-4851. Available from: https://dx.doi.org/10.1080/13504851.2018.1486977.

Basic information

• Original name: Social aspirations in European banks: peer-influenced risk behaviour.
• Authors: LYÓCSA, Štefan (703 Slovakia, guarantor, belonging to the institution), Tomáš VÝROST (703 Slovakia) and Eduard BAUMÖHL (703 Slovakia).
• Edition: Applied Economics Letters, UK, Taylor & Francis, 2019, 1350-4851.

Other information

• Original language: English
• Type of outcome: Article in a journal
• Field of Study: 50204 Business and management
• Country of publisher: United Kingdom of Great Britain and Northern Ireland
• Confidentiality degree: is not subject to a state or trade secret
• WWW: URL
• Impact factor: Impact factor: 0.752
• RIV identification code: RIV/00216224:14560/19:00108926
• Organization unit: Faculty of Economics and Administration
• Doi: http://dx.doi.org/10.1080/13504851.2018.1486977
• UT WoS: 000455124800007
• Keywords in English: Social aspiration; European banks; performance; risk behaviour; prospect theory
• Tags: International impact, Reviewed

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 behavioural 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 behaviour 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.