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

Volume 16 No 5 (2018)

Nan Xie, Zongrun Wang , Yanju Zhou

DOI: 10.14704/nq.2018.16.5.1321

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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