Competition and bank opacity

Liangliang JIANG, Ross LEVINE, Chen LIN

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

20 Citations (Scopus)

Abstract

Did regulatory reforms that lowered barriers to competition increase or decrease the quality of information that banks disclose to the public? By integrating the gravity model of investment with the state-specific process of bank deregulation that occurred in the United States from the 1980s through the 1990s, we develop a bank-specific, time-varying measure of deregulation-induced competition. We find that an intensification of competition reduced abnormal accruals of loan loss provisions and the frequency with which banks restate financial statements. The results suggest that competition reduces bank opacity, potentially enhancing the ability of markets to monitor banks.
Original languageEnglish
Pages (from-to)1911-1942
Number of pages32
JournalThe Review of Financial Studies
Volume29
Issue number7
DOIs
Publication statusPublished - 1 Jul 2016

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Opacity
Deregulation
Quality of information
Gravity model
Regulatory reform
Financial statements
Abnormal accruals
Time-varying
Loan loss provisions

Cite this

JIANG, L., LEVINE, R., & LIN, C. (2016). Competition and bank opacity. The Review of Financial Studies, 29(7), 1911-1942. https://doi.org/10.1093/rfs/hhw016
JIANG, Liangliang ; LEVINE, Ross ; LIN, Chen. / Competition and bank opacity. In: The Review of Financial Studies. 2016 ; Vol. 29, No. 7. pp. 1911-1942.
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JIANG, L, LEVINE, R & LIN, C 2016, 'Competition and bank opacity', The Review of Financial Studies, vol. 29, no. 7, pp. 1911-1942. https://doi.org/10.1093/rfs/hhw016

Competition and bank opacity. / JIANG, Liangliang; LEVINE, Ross; LIN, Chen.

In: The Review of Financial Studies, Vol. 29, No. 7, 01.07.2016, p. 1911-1942.

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

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