Next Article in Journal
Global Hedging through Post-Decision State Variables
Previous Article in Journal
Safety Evaluation of Evacuation Routes in Central Tokyo Assuming a Large-Scale Evacuation in Case of Earthquake Disasters
Previous Article in Special Issue
Capital Regulation, the Cost of Financial Intermediation and Bank Profitability: Evidence from Bangladesh
Article Menu

Export Article

Open AccessArticle
J. Risk Financial Manag. 2017, 10(3), 15; doi:10.3390/jrfm10030015

Trade Openness and Bank Risk-Taking Behavior: Evidence from Emerging Economies

School of Economics and Management, China University of Geosciences Wuhan, Wuhan 430074, China
International School, East China Jiao Tong University, Nanchang 330013, China
School of Public Administration, China University of Geosciences Wuhan, Wuhan 430074, China
Author to whom correspondence should be addressed.
Received: 22 June 2017 / Revised: 21 July 2017 / Accepted: 25 July 2017 / Published: 29 July 2017
(This article belongs to the Special Issue Financial Stability and Regulation / Basel III)
View Full-Text   |   Download PDF [304 KB, uploaded 29 July 2017]


In this paper, we examine the impact of trade openness on bank risk-taking behavior. Using a panel dataset of 291 banks from 37 emerging countries over the period from 1998 to 2012, we find that higher trade openness decreases bank risk-taking. The results are robust when we use alternative bank risk-taking proxies and alternative estimation methods. We argue that trade openness provides diversification opportunities to banks in lending activities, which decrease overall bank risk. Further to this end, we observe that higher trade openness helps domestic banks to smooth out income volatility and decreases the impact of a financial crisis on banks. View Full-Text
Keywords: trade openness; bank risk-taking; financial crisis; Z-score trade openness; bank risk-taking; financial crisis; Z-score
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

Scifeed alert for new publications

Never miss any articles matching your research from any publisher
  • Get alerts for new papers matching your research
  • Find out the new papers from selected authors
  • Updated daily for 49'000+ journals and 6000+ publishers
  • Define your Scifeed now

SciFeed Share & Cite This Article

MDPI and ACS Style

Ashraf, B.N.; Arshad, S.; Yan, L. Trade Openness and Bank Risk-Taking Behavior: Evidence from Emerging Economies. J. Risk Financial Manag. 2017, 10, 15.

Show more citation formats Show less citations formats

Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Related Articles

Article Metrics

Article Access Statistics



[Return to top]
J. Risk Financial Manag. EISSN 1911-8074 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
Back to Top