Table 12.
Bank performance and stability during the COVID-19 pandemic. The role of national Culture.
| Panel A: Bank performance |
Panel B: Bank stability |
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|---|---|---|---|---|---|---|---|---|---|
| Panel (i): Uncertainty avoidance |
|||||||||
| (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | |
| ROAA | ROAE | NIM | CIN | ZSC | NPL | PRK | LRK | ORK | |
| COVID-19 | -0.530 * ** | -3.352 * ** | -0.093 * ** | 0.034 * ** | 0.414 * ** | 0.147 * ** | 0.007 * ** | 0.018 * ** | 0.211 * ** |
| (0.148) | (1.120) | (0.012) | (0.006) | (0.075) | (0.040) | (0.002) | (0.003) | (0.057) | |
| UAI | 0.233 * ** | 0.389 * ** | 0.342 * ** | 0.168 | 0.420 * ** | 0.049 | 0.945 * * | 0.060 | 0.179 * ** |
| (0.028) | (0.043) | (0.052) | (0.299) | (0.052) | (0.041) | (0.438) | (0.422) | (0.067) | |
| COVID19 *UAI | 0.259 * ** | 0.156 * * | 0.765 * * | 0.684 | 0.367 * ** | 0.021 | 0.059 | 0.055 | -0.130 * |
| (0.092) | (0.067) | (0.361) | (0.454) | (0.051) | (0.019) | (0.063) | (0.073) | (0.076) | |
| Control variables | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Time FE | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Country FE | No | No | No | No | No | No | No | No | No |
| -5.299 * ** | -28.868 * ** | 4.035 * * | 16.514 * * | -3.035 * ** | 3.459 * ** | 2.307 * * | 3.563 * ** | 2.466 * ** | |
| (1.426) | (9.775) | (1.991) | (6.960) | (0.807) | (0.897) | (0.940) | (0.471) | (0.441) | |
| Observations | 23,531 | 23,180 | 23,723 | 21,732 | 22,381 | 22,273 | 23,793 | 23,257 | 23,257 |
| Adjusted R2 | 0.151 | 0.142 | 0.191 | 0.162 | 0.164 | 0.126 | 0.124 | 0.123 | 0.090 |
| Panel (ii): Power distance | |||||||||
| (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | |
| ROAA | ROAE | NIM | CIN | ZSC | NPL | PRK | LRK | ORK | |
| COVID-19 | -0.455 * ** | -1.521 * ** | -0.041 * ** | 0.070 * ** | 0.379 * ** | 0.149 * * | 0.170 * ** | 0.033 * * | 0.015 * |
| (0.088) | (0.476) | (0.003) | (0.013) | (0.052) | (0.067) | (0.051) | (0.015) | (0.008) | |
| PDI | 0.166 * ** | 0.342 * ** | 0.180 * * | -0.462 | 0.220 * ** | 0.038 | -0.046 | -0.002 | 0.266 * * |
| (0.051) | (0.052) | (0.075) | (0.335) | (0.034) | (0.043) | (0.078) | (0.057) | (0.117) | |
| COVID19 *PDI | 1.635 * ** | 1.483 * ** | 0.266 * * | 0.296 | 0.227 * * | 0.029 | -0.026 | 0.065 | 0.013 * |
| (0.238) | (0.350) | (0.117) | (0.354) | (0.089) | (0.019) | (0.097) | (0.074) | (0.007) | |
| Control variables | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Time FE | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Country FE | No | No | No | No | No | No | No | No | No |
| -4.515 * ** | -23.924 * * | 1.002 | 15.355 * * | -3.173 * ** | 3.126 * ** | 2.064 * * | -3.275 * ** | -1.484 * ** | |
| (1.357) | (9.789) | (1.983) | (6.813) | (0.794) | (0.915) | (0.903) | (0.033) | (0.346) | |
| Observations | 23,953 | 23,601 | 23,940 | 21,180 | 22,781 | 22,602 | 23,270 | 23,729 | 23,239 |
| Adjusted R2 | 0.144 | 0.133 | 0.184 | 0.159 | 0.162 | 0.124 | 0.123 | 0.122 | 0.132 |
| Panel (iii): Individualism | |||||||||
| (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | |
| ROAA | ROAE | NIM | CIN | ZSC | NPL | PRK | LRK | ORK | |
| COVID-19 | -0.372 * ** | -1.868 * ** | -0.078 * ** | 0.220 * ** | 0.171 * * | 0.433 * ** | 0.136 * * | -0.155 | 0.040 |
| (0.051) | (0.320) | (0.012) | (0.048) | (0.069) | (0.053) | (0.067) | (0.221) | (0.072) | |
| IDV | -0.257 * ** | -0.211 * ** | -0.296 | -0.032 | 0.116 * ** | 0.078 * | 0.283 * ** | 0.020 | 0.244 * ** |
| (0.033) | (0.034) | (0.305) | (0.100) | (0.021) | (0.042) | (0.078) | (0.040) | (0.030) | |
| COVID19 *IDV | -0.172 * * | -0.144 * * | 0.045 | 0.064 | 0.190 * * | 0.103 | 0.011 | -0.452 | 0.101 * |
| (0.081) | (0.067) | (0.069) | (0.048) | (0.076) | (0.070) | (0.024) | (0.335) | (0.059) | |
| Control variables | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Time FE | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Country FE | No | No | No | No | No | No | No | No | No |
| -5.635 * ** | -26.999 * ** | 4.437 * ** | 17.786 * ** | -3.257 * ** | -3.510 * ** | -2.367 * ** | -2.063 * ** | -1.046 * ** | |
| (1.357) | (8.189) | (1.041) | (5.722) | (0.887) | (0.955) | (0.584) | (0.311) | (0.069) | |
| Observations | 23,253 | 23,201 | 23,140 | 20,330 | 20,123 | 20,432 | 21,710 | 21,249 | 21,239 |
| Adjusted R2 | 0.149 | 0.143 | 0.192 | 0.154 | 0.151 | 0.119 | 0.119 | 0.110 | 0.111 |
This table shows the role of national culture during the COVID-19 pandemic. The sample consists of 2073 banks in 106 countries from 2016 Q1 to 2021 Q2. Panel A represents the outcomes for bank performance measured as ROA, ROE, NIM, and CIN. Panel B shows the bank stability results, which are measured as ZSC, NPL PRK, LRK, and ORK. COVID-19 is our primary explanatory variable of interest which equals one during the first three quarters of 2020 and 0 otherwise. To capture the national culture, we use the three cultural dimensions, namely, uncertainty avoidance (UAI), power distance (PDI), and Individualism versus collectivism (IDV) from Hofstede's (2001). We also control several bank-specific and country-specific factors, time (quarter) fixed effects, and bank-fixed effects. Robust standard errors are clustered at the country level and reported in parentheses *** p < 0.01, ** p < 0.05, * p < 0.1.