Earnings management and bank funding
by Van Dan Dang; Hoang Chung Nguyen
Global Business and Economics Review (GBER), Vol. 30, No. 1, 2024

Abstract: This paper investigates the impact of earnings management on bank funding. Using a sample of Vietnamese commercial banks between 2007 and 2019, we reveal that greater earnings opacity of banks causes a significant drop in total bank funding. When decomposing total funding into its components, we find that wholesale funds are the primary driver of the result, while no significant effect of earnings manipulation on retail deposits is documented. Further analyses on bank heterogeneity indicate that the unfavourable impact of earnings opacity on banks' wholesale funds is less pronounced for banks that are better capitalised, more liquid, larger in size, more profitable, and less risky. Through this consistent pattern, we can conclude that the financial strength of banks may alleviate the adverse effect of earnings opacity on bank funding. Our findings firmly survive after a series of robustness tests.

Online publication date: Mon, 04-Dec-2023

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the Global Business and Economics Review (GBER):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com