|dc.contributor.author||Nguyen, Duc Duy||en
|dc.description.abstract||This thesis consists of three essays on the performance implications of senior
decision-makers in the banking industry. While the first chapter looks at one aspect
of bank performance from a regulatory perspective, the next two chapters study
performance from an investor perspective.
The first chapter uses regulatory enforcement actions issued against US banks
to show that both board monitoring and advising are effective in preventing
misconduct by banks. While better monitoring by boards prevents all categories of
misconduct, better advising prevents misconduct of a technical nature. Board
monitoring increases the likelihood that misconduct is detected, increases the
penalties imposed on the CEO, and alleviates shareholder wealth losses following the
detection of misconduct by regulators. This chapter offers novel insights on how to
structure bank boards to prevent bank misconduct.
The second chapter seeks to understand how the characteristics of bank
executives affect the market performance of US banks. To explore the expected
performance effects linked to executive characteristics, the changes in the market
valuation of banks linked to announcements of executive appointments are estimated.
The chapter shows that age, education and the prior work experience of executives
create shareholder wealth while gender is not linked to measureable value effects.
Furthermore, these wealth effects are moderated by the level of influence of
incoming executives, with their magnitude diminished under independent boards and
higher if the incoming executive is also appointed as CEO. The results are robust to
the treatment of selection bias. This chapter contributes to the current debate on
whether and how individual executives matter for firm performance. The findings
also shed light on the value of human capital in the banking industry.
The third chapter explores how the cultural heritage of senior decision-makers
affects bank outcomes. To study cultural heritage, this chapter focuses on
US-born CEOs who are the children or grandchildren of immigrants. Using a hand-collected
dataset that tracks the family tree of US bank CEOs, it is shown that the
cultural characteristics prevailing in the country of a CEO’s ancestors influence firm
performance under pressure. How CEOs respond to competitive pressure is driven by
specific cultural dimensions and is causally related to corporate policy choices. To
establish causality, I use variation in industry competition generated by a quasi-natural
experiment, the staggered adoption of barriers to US interstate branching in
the 1990s. I also use an out-of-sample test using a non-banking competitive shock,
the Canada-United States Free Trade Agreement, and find robust results.||en
|dc.publisher||The University of Edinburgh||en
|dc.relation.hasversion||Nguyen, D., Hagendorff, J. and Eshraghi, A., 2015, “Which executive characteristics create value in banking? Evidence from Appointment Announcements,” Corporate Governance: An International Review 23: 112-128||en
|dc.title||Boards, CEOs and bank behavior: regulatory and performance perspectives||en
|dc.type||Thesis or Dissertation||en
|dc.type.qualificationname||PhD Doctor of Philosophy||en