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Relevance of size in predicting bank failures
Author(s) -
Alzugaiby Basim,
Gupta Jairaj,
Mullineux Andrew,
Ahmed Rizwan
Publication year - 2021
Publication title -
international journal of finance and economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 39
eISSN - 1099-1158
pISSN - 1076-9307
DOI - 10.1002/ijfe.1973
Subject(s) - econometrics , covariate , economics , bank failure , control variable , relevance (law) , regression , regression analysis , statistics , mathematics , financial system , political science , law
Employing a statistical model‐building strategy, this study aims to analyse the United States' bank failures across different size categories (small, medium, and large). Our results suggest that factors associated with bank failures vary across respective size categories, and the average marginal effects (AMEs) of mutually significant covariates also exhibit significant variability across different size classes of banks. The results are robust to up‐to 3 years of lagged regression estimates, various control variables, interaction between bank size and bank charter, alternative bank size classifications, and macroeconomic crisis periods.