Competition or manipulation? An empirical evidence of determinants of the earnings persistence of the U.S. banks

Hung, C.-H. D. , Jiang, Y., Liu, F. H. and Tu, H. (2018) Competition or manipulation? An empirical evidence of determinants of the earnings persistence of the U.S. banks. Journal of Banking and Finance, 88, pp. 442-454. (doi:10.1016/j.jbankfin.2018.01.010)

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Abstract

We examine the impact of competition on bank earnings persistence by exploiting a natural experiment following interstate banking deregulation that increased bank competition. We find that bank earnings adjustment speed increases after their states implement the deregulation. This relationship is weakened, however, with the increase of bank's abilities to sustain earnings, as reflected in size, diversification, managerial efficiency and safety. We further find that the impact of compeititon on bank earnings adjustment speed is direct but not indirectly through the channel of earnings management.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:jiang, yuxiang and Hung, Dr Daniel
Authors: Hung, C.-H. D., Jiang, Y., Liu, F. H., and Tu, H.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:Journal of Banking and Finance
Publisher:Elsevier
ISSN:0378-4266
ISSN (Online):1872-6372
Published Online:31 January 2018
Copyright Holders:Copyright © 2018 Elsevier B.V.
First Published:First published in Journal of Banking and Finance 88:442-454
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher

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