Fotios Pasiouras

• PhD
• Professor at Montpellier Business School

We use a sample of banking institutions across 57 countries to investigate the relationship between country‐level perceptions of corporate ethical behavior and the cost of bank equity. We find evidence that banks operate with lower costs of equity in countries with higher corporate ethical behavior ratings. This finding is robust to the inclusion o...

Despite important research advances in the areas of family firm ownership, social capital, and bribe payments, their three-way theoretical and empirical relationship remains unexplored. To address this gap in the literature we use a sample of 13,639 firms from 25 developing countries and examine whether and how social capital moderates the associat...

This study investigates the relationship between the culture of secrecy and stock price comovement using a large sample of firms in 49 countries over the period 1990 to 2019. We find that stock prices in secretive societies comove more than stock prices in less secretive societies. This higher comovement occurs primarily because idiosyncratic volat...

This study examines the association between the culturally endorsed charismatic leadership style in a society and stock price crash risk. The results reveal a positive and statistically significant association, providing support to the arguments about the dark-side view of charismatic leadership. This finding remains robust to the inclusion of vari...

We use a comprehensive cross-country sample to investigate whether and how the country-level social capital influences the firm-level stock price crash risk. We document a negative and statistically significant effect, which is robust to various tests including IV estimations that account for endogeneity concerns. When we disaggregate social capita...

This paper examines the impact of three culturally endorsed leadership prototypes on bank lending corruption. We bring together studies that approach the corruption of bank lending officers from the perspective of a principal-agent problem and studies from the leadership literature, suggesting leadership as an alternative to contractual solutions t...

Building on the upper echelon and signaling theories, we hypothesize that the perceptions about corporate ethical behavior in the country of origin of a venture’s founders may provide an important piece of information to the selection committees of impact-oriented accelerator programmes that serves as a signal for the trustworthiness and opportunis...

This study examines the association between political connectiveness in the banking sector and the aggregate profitability of the sector. Evidence from an international sample of 59 countries points towards a positive effect. This finding holds while controlling for a variety of country-level characteristics, such as macroeconomic conditions, econo...

Over the past years, studies shed light on how social norms and perceptions potentially affect loan repayments, with overtones for strategic default. Motivated by this strand of the literature, we incorporate collective social traits in predictive frameworks on credit card delinquencies. We propose the use of a two-stage framework. This allows us t...

We examine, for the first time in the literature, the impact of social capital on the cost of bank equity worldwide. We reach two interesting conclusions. First, consistent with the view that the social capital of a region can constrain managerial opportunistic behavior, enhance the flow of information, and mitigate moral hazard and agency concerns...

The literature suggests that trust can influence the behavior of economic agents and improve access to financing for both households and corporations. Subsequently, this might have implications for the consumption of households and the investments of corporations. Therefore, trust could mitigate the negative impact of financial stress on economic g...

Natural disasters have caused over a million of deaths and $3 trillion in economic losses during the last 20 years. However, theoretical and empirical studies have not reached a conclusion as for their effect on economic growth, and the results can best be described as mixed. The present study proposes the use of a quantile on quantile (QQ) approac...

This study examines the impact of trust and a national culture of secretiveness on the number of bank relationships per firm. We hypothesize that the degree of openness of a firm and trust between economic agents may influence the willingness of the firm to release sensitive information to its lenders, as well as the decision between maintaining si...

We study the impact of social capital and perceptions about corporate ethical behaviour on the use of collateral in corporate borrowing. Using a dataset of more than 17,500 firms operating in over 100 transition and developing countries, we find evidence that country-level social capital and better perceptions about corporate ethical behaviour are...

We examine whether state ownership affects the effectiveness of macroprudential policies in curbing bank credit growth. Using a panel data set of 386 banks from 50 countries around the world over the period 2001–2013, we find that macroprudential policies limit credit growth; however, the coefficient of the interaction between state ownership and m...

Central banks play an important role in the economy. They are responsible for the conduct of monetary policy, and in several countries, they get involved in the supervision of the financial sector. We derive a simple theoretical model to illustrate how culture may influence a politician's choice of regulatory architecture and the assignment of resp...

Central banking has been traditionally characterized by mystique and an organizational culture of secrecy. While in recent years there has been a shift towards greater transparency in response to a public demand for higher accountability of independent central banks, the degree of transparency continues to vary across countries. The present study e...

Over the past years, the financial technology industry has gained considerable attention from policy makers and regulators, market participants, as well as the general public. Despite the interest of these stakeholders, academic research on the topic is scarce and we aim to extend the literature by examining the impact of financial leverage on the...

Following the 2007–2008 global financial crisis, regulators introduced a series of supervisory tools for the closer monitoring of financial institutions. Among them, stress tests and capital exercises performed by the Federal Reserve System (Fed) and the European Banking Authority/European Central Bank (EBA/ECB) play a critical role in the surveill...

Public awareness about issues surrounding the physical environment and climate change is becoming more important around the world. However, there is a lack of research on the association between environment‐related perceptions and reputational exposure. Therefore, we know little about whether and how reputational exposure is shaped by institutional...

This study examines the impact of macroprudential regulations on bank profit efficiency. The latter is being estimated with a production frontier function using a cross-country dataset of more than 3,000 banks from over 130 countries during 2013-2018. The results show that macroprudential regulatory policies diminish bank efficiency. This finding a...

This study examines the interplay between political influence and regulatory decision-making.Political influence is captured based on whether a bank is headquartered in a state where an elected official holds a chair position on a congressional committee related to the banking and financial services industry. Using data of US commercial banks over...

We propose a holistic evaluation framework that banks could adopt when screening corporate entities. The framework is based on the development of a composite indicator of social, environmental and financial performance. This integrated view of evaluation is conceptually aligned with ISO standards and empirical proposals of academics and market prac...

We propose a holistic evaluation framework that banks could adopt when screening corporate entities. The framework is based on the development of a composite indicator of social, environmental and financial performance. This integrated view of evaluation is conceptually aligned with ISO standards and empirical proposals of academics and market prac...

Over the last decade, financial consumer protection policies have attracted a lot of attention among policy makers. However, empirical evidence on the impact of such policies on bank efficiency is nonexistent. At the same time, important differences on the instruments used to conduct prudential and financial consumer supervision do not permit the g...

Using a data set of 1,618 firms from 39 countries, we examine the influence of the educational attainment of a firm's board of directors on its credit rating. We construct a Leadership Education Index that reflects the educational level of the key members of the board. We document, after controlling for firm and country-specific characteristics, th...

Central banking has been traditionally characterized by mystique and an organizational culture of secrecy. While in recent years there has been a shift towards greater transparency around the globe, the degree of transparency continues to vary across countries. This is surprising because the transparency of central banks has been associated with po...

In recent years, accelerator programs experienced substantial growth, becoming an important part of the entrepreneurial ecosystems around the world. New ventures that want to participate in such programs must go through a multi-stage and highly competitive process, with only one out of ten applicants being successful. However, our knowledge with re...

Using a sample of EU countries over the period 2002-2018, we find that a national culture of uncertainty avoidance and trust has a conditional role in the interplay between financial stress and economic growth. However, the cultural dimension of individualism does not appear to influence this relationship. By disaggregating the GDP into its four ma...

Using a sample of around 30 countries over the period 2001-2015, this study provides evidence that deeply rooted cultural differences are significantly associated with the use of mortgage debt. More detailed, we find that power distance and uncertainty avoidance have a negative impact on the value of the total outstanding residential loans to GDP....

The present study uses a sample of up to 356 banks from 50 countries over the period 2002-2017 to examine whether and how macroprudential policies and corporate governance interact in shaping bank risk. Our results show that the impact of bank corporate governance on risk-taking depends critically on the macroprudential policies in force. In more d...

Using a global sample, this study sketches the impact of insurance regulations on the life insurance sector, revealing a significant negative association between supervisory control on policy conditions of life annuities as well as pension products and the development of the industry. A similar inverse relation is observed between the index of capi...

Cryptocurrencies, with Bitcoin being the most notable example, have attracted considerable attention in recent years, and they have experienced large fluctuations in their price. While a few studies employ conventional statistical and econometric approaches to reveal the driving factors of Bitcoin's prices, research on the development of forecastin...

We study the relationship between culture and the use of collateral in corporate borrowing. Using a dataset of over 14,000 firms from 70 transition and developing countries, we find evidence that the likelihood to pledge collateral is lower in countries with higher uncertainty avoidance and corporate ethical behavior. In contrast, long-term orienta...

This study examines the interplay between political influence and regulatory decision-making in the US banking industry. In particular, we assess whether elected officials with power in Congress impact regulatory decision making in the banking industry. Political influence is captured by whether a bank is headquartered in a state where an elected o...

This paper aims to examine whether and how, certain country-specific characteristics shape the profitability of SMEs. Using a large sample of around 40,000 firms operating in 25 EU countries over the period 2006-2014 we find that freedom from corruption, a better environment in terms of the conditions that could contribute to the ease of getting cr...

This study aims to examine whether and how bank efficiency estimates are influenced by the shift from local GAAP to IFRS in EU. We use financial statements prepared during the transition period, and stochastic frontier analysis to obtain cost and profit efficiency estimates for a sample of 141 banks from 15 countries. Our main finding is that the b...

A number of recent studies compare the performance of Islamic and conventional banks with the use of individual financial ratios or efficiency frontier techniques. The present study extends this strand of the literature, by comparing Islamic banks, conventional banks, and banks with an Islamic window with the use of a bank overall financial strengt...

Using a data set of approximately 3,000 commercial banks from more than 100 countries, I examine the impact of financial consumer protection policies on the cost of financial intermediation. I find evidence that the existence of internal mechanisms for handling complaints, requirements for fair treatment, supervisory power related to consumer prote...

There are many studies in the finance and management literature that examine the impact of diversification on performance. Yet, the literature remains inconclusive as for the potential benefits in terms of risk and return. The present study aims to re-examine this issue, while proposing a methodological framework that integrates various bank perfor...

We link genetic diversity in the country of origin of the firms’ board members with corporate performance via board members’ nationality. We hypothesize that our approach captures deep-rooted differences in cultural, institutional, social, psychological, physiological, and other traits that cannot be captured by other recently measured indices of d...

This study examines the effect of regulations on European insurers’ profitability and risk-adjusted returns. We find an inverted U-shaped relationship between return on assets and regulations relating to capital adequacy, accounting and auditing requirements, and disclosures to supervisors. In contrast, requirements related to technical provisions...

Over the last fifteen years, many countries introduced reforms into the supervisory architecture of their financial sector. However, there is no evidence on whether specific supervisory arrangements were more successful than others during the crisis. Empirical evidence on the topic is in general scarce and there are reasonable theoretical arguments...

This paper investigates the role of technical reserves in the income smoothing behavior of insurance companies. This is one of the first attempts in the literature to trace such relationship in the insurance industry, especially at a multi-country setting. The experience of 770 insurance firms operating in 87 countries over the period 2000-2009 rev...

This study examines whether and how the stress testing of European banks in 2010, 2011, and 2014 is related to their technical, allocative, and cost efficiency. Using a sample of large commercial banks operating in 20 European countries, and Data Envelopment Analysis (DEA), the authors perform comparisons between banks that were included in one of...

We link genetic diversity in the country of origin of the firms’ board members with corporate performance via board members’ nationality. We hypothesize that our approach captures deep-rooted differences in cultural, institutional, social, psychological, physiological, and other traits that cannot be captured by other recently measured indices of d...

This study uses logistic regression for the development of prediction models that distinguish between share-repurchasing and non-share repurchasing firms. The estimated models form the basis for an investment strategy, according to which one invests on the stock of the firms that are predicted as repurchasing ones. Using a sample of firms from...

Macro prudential regulation requires a rigorous process for calculating bank capital charges based on their systemic risk. Using data from the largest global financial institutions we document the existence of extreme event dependence between banks during the recent financial crisis. Subsequently, we extend existing approaches by proposing a model...

This paper investigates the relationship between the tax rate on bank income and bank cost and profit efficiency. Our sample consists of 1,754 observations from 620 publicly quoted commercial banks operating in 67 countries between 2004 and 2006. We estimate a global frontier while controlling for various country-specific characteristics such as re...

In recent years, there has been an increase in the number and value of securities class actions (SCAs), attracting the attention of various stakeholders such as investors, managers, policy makers, lawyers, etc. The present study extends the literature, by investigating for the first time the development of a classification model to forecast securit...

There exists a lively debate as for the appropriate architecture of the financial supervision regime, with a long list of theoretical advantages and disadvantages associated with each one of its key dimensions. The present study investigates whether and how bank profit efficiency is influenced by the central bank’s involvement in financial supervis...

This study investigates whether the capital market values the efficiency of firms. After tracing stock returns and efficiency changes of 399 listed insurance firms in 52 countries during the 2002–2008 period, the paper reports a positive and statistically significant relationship between profit efficiency change and market adjusted stock returns. H...

In this study, we empirically investigate the relationship between financial and auditing requirements, capital requirements, official supervisory power, and the likelihood of receiving a qualified audit opinion. The sample consists of 71 qualified financial statements and 17,526 unqualified ones, from 3,642 credit institutions operating in 15 old...

This study investigates whether the capital market values the efficiency of firms. After tracing stock returns and efficiency changes of 399 listed insurance firms in 52 countries during the 2002-2008 period, the paper reports a positive and statistically significant relationship between profit efficiency change and market adjusted stock returns. H...

This study presents the first attempt to develop classification models for the prediction of share repurchase announcements using multicriteria decision aid (MCDA) techniques. We use three samples consisting of 434 UK firms, 330 French firms, and 296 German firms, to develop country-specific models. The MCDA techniques that are applied for the deve...

This paper first outlines why Multi-Criteria Decision Aid (MCDA techniques could be usefully in the prediction of acquisition targets and provides a review of relevant studies. Then, it present the UTADIS technique and its application on a dataset of acquired and non-acquired UK firms. The application indicates that UTADIS not only outperforms a mo...

This Chapter presents an application of quantile regression analysis in estimating the cost efficiency of 1,520 commercial banks operating in 73 countries during 2000-2006. This approach allows us to estimate banks’ cost function for various quantiles of the conditional distribution and to examine the tail behaviours of that distribution. In furthe...

The purpose of this study is to estimate and explain the performance of non-life (i.e., property and casualty) insurers. The analysis consists of two stages. First, we propose the use of a multicriteria method to assess the condition of insurers while considering simultaneously a set of conflicting financial criteria. Then, we use regression analys...

Until the 1980s the Greek banking industry was characterized by various restrictions and administrative regulations, with extensive government intervention influencing the pricing, volume and allocation of financial resources, all contributing to a low degree of competition and poor competitiveness.1 However, in an attempt to keep up with developme...

Retail banking constitutes the main element of the domestic banking system. Therefore, this chapter discusses the developments in the distribution channels, the means of payment, the financial cards market, the loans market and the deposits market in Greece over the last decade. The statistics in Chapter 1 illustrate that the number of retail bank...

We investigate the determinants of commercial bank acquisitions in the former fifteen countries of the European Union by evaluating the impact of bank-specific measures, such as size, growth and efficiency of banks, and external influences reflecting industry level differences in the regulatory and supervision framework, market environment and econ...

We examine a sample of 18 banks operating in the UK between 2001 and 2006 to provide for the first time evidence on the association between the efficiency of UK banks and two important aspects of board structure, namely board size and composition. We first use data envelopment analysis to estimate the technical, allocative, and cost efficiency of b...

This paper investigates the role of technical reserves in the income smoothing behavior of insurance companies. This is one of the first attempts in the literature to trace such relationship in the insurance industry, especially at a multi-country setting. The experience of 770 insurance firms operating in 87 countries over the period 2000–2009 rev...

This study aims to assess the Cost Efficiency (CE) of the Greek cooperative banks over the period 2000–2005. We first use Data Envelopment Analysis (DEA) to estimate the technical, allocative and cost efficiency for each bank in sample. Then, we use a bootstrapping censored (Tobit) regression approach to determine whether and how internal and ext...

Banking crises can be damaging for the economy, and as the recent experience has shown, nowadays they can spread rapidly across the globe with contagious effects. Therefore, the assessment of the stability of the banking sectors is important for regulators, depositors, investors and the general public. In the present study, we propose the developme...

Using a sample of 50 countries during 2000-2008, this study investigates the possible impact of insurance regulations on life insurance consumption. The evidence reveals a negative and statistically significant association between supervisory control of the policy conditions of life annuities and pension products and life insurance consumption. A s...

This study presents the first attempt to develop classification models for the prediction of share repurchases using multicriteria decision aid (MCDA) methods. The MCDA models are developed using two methods namely UTilités Additives DIScriminantes (UTADIS) and ELimination and Choice Expressing REality (ELECTRE) TRI, through a ten-fold cross-valida...

This paper investigates the relevance of non-traditional activities in the estimation of bank efficiency levels using a sample of 752 publicly quoted commercial banks from 87 countries around the world, allowing comparison of the impact of such activities under different levels of economic development, geographical regions and other country charact...

The purpose of the present study is the development of classification models for the identification of acquirers and targets in the Asian banking sector. We use a sample of 52 targets and 47 acquirers that were involved in acquisitions in 9 Asian banking markets during 1998–2004 and match them by country and time with an equal number of non-involve...

Purpose The purpose of this paper is to investigate the total factor productivity (TFP) change in the Greek cooperative banking industry over the period 2000‐2005. Design/methodology/approach The paper employs the Malmquist index and estimate two models, one based on the intermediation approach, and one based on the production approach. TFP change...

This paper uses discriminant and logit analyses to develop prediction models to identify bank acquisition targets. We consider several methodological issues, such as whether the choice of the estimation technique, the selection of variables, the use of raw versus industry relative data, the train-and-test sampling scheme, and the criteria for model...

This study analyses the impact of OBS on banking productivity growth using a sample of 752 banks from 87 countries to calculate their productivity growth between 1999 and 2006. Our international setting allows us to analyse differences on the performance on banking institutions among various groups of countries with different economic and financial...

This paper uses stochastic frontier analysis to provide international evidence on the impact of the regulatory and supervision framework on bank efficiency. Our dataset consists of 2853 observations from 615 publicly quoted commercial banks operating in 74 countries during the period 2000–2004. We investigate the impact of regulations related to th...

This short paper presents the first attempt to examine empirically the relationship between the level of bank liquidity and the structure of the board of directors, in terms of board size and independence. A novel database on these board characteristics is built that includes banks operating in 10 OECD countries during the period 2000-2006. We find...

This paper provides the first cross-country study on the impact of regulations on the soundness of insurance firms, using data on over 1,700 insurance firms operating in 46 countries. We find that the power of the supervisory authorities and regulations related to technical provisions have an impact on soundness that is robust to controls for firm-...

This study uses a sample of foreign and domestic banks operating in Greece during 1999-2004 to examine the impact of ownership on efficiency. We estimate an input oriented data envelopment analysis (DEA) model under variable returns to scale with inputs and outputs selected on the basis of a profit-oriented approach. The results indicate an average...