DOI: 10.14704/nq.2018.16.5.1321

Neural Correlates of Behavioral Preference for Executive and Bank Risk-taking

Nan Xie, Zongrun Wang, Yanju Zhou

Abstract


We examine the effect of behavioral preference of executives on bank risk-taking using the method of neural correlation. We build a brain activity causality model related to leadership behavior. We find that behavioral preference of executives is positively related to higher bank risk-taking. More specifically, banks with behavioral preference of executives tend to have higher default risk, credit risk as well as loan risk. Furthermore, we find that the relationship is especially significant among listed banks.

Keywords


Cognitive Neuroscience, Behavioral Preference of Executives, Risk-taking

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