Northampton Electronic Collection of Theses and Research

Risk culture and cost of capital – Insight from European banks

Ibeji, N. and Acheampong, A. (2024) Risk culture and cost of capital – Insight from European banks. Economics Letters. 243, pp. 1-7. 0165-1765.

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21109:65969
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Acheampong_Ibeji_2024_Risk_culture_and_cost_of_capital_Insight_from_European_banks_AAM.pdf - Accepted Version
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Abstract:
This study examines the impact of risk culture on the cost of capital (i.e., WACC, Cost of equity and cost of debt) in European banks. We measure risk culture using comprehensive textual analysis approach. Based on 134 banks from 2005 to 2022, findings reveal that risk culture is negatively associated with all cost of capital measures. This indicates that robust risk culture reduces information asymmetry and boosts investor confidence, leading to lower costs of capital. Our findings reflect the importance of aligning risk management practices with regulatory requirements and investor expectations.
Additional Information:
© 2024 Elsevier B.V. All rights are reserved, including those for text and data mining, AI training, and similar technologies.
Uncontrolled Keywords:
/dk/atira/pure/sustainabledevelopmentgoals/industry_innovation_and_infrastructure
Creators:
Ibeji, N. and Acheampong, A.
Date:
20 August 2024
Date Type:
Publication
Page Range:
pp. 1-7
Journal or Publication Title:
Economics Letters
Volume:
243
Number of Pages:
7
Language:
English
ISSN:
0165-1765
Status:
Published / Disseminated
Refereed:
Yes
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