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Open AccessArticle

The Nexus between Social Capital and Bank Risk Taking

Institute of International Business, Shanghai University of International Business and Economics, Shanghai 200000, China
Department of Economics, Hong Kong Baptist University, Hong Kong
School of International Business Administration, Shanghai University of Finance and Economics, 777 Guoding Road, Shanghai 200000, China
Department of Economics and Lau Chor Tak Institute of Global Economics and Finance, The Chinese University of Hong Kong, Hong Kong
Department of International Economics and Trade, Nanjing University, Nanjing 210000, China
Author to whom correspondence should be addressed.
Academic Editor: Michael McAleer
J. Risk Financial Manag. 2016, 9(3), 9;
Received: 10 May 2016 / Revised: 4 July 2016 / Accepted: 14 July 2016 / Published: 29 July 2016
(This article belongs to the Collection Feature Papers of JRFM)
This study explores social capital and its relevance to bank risk taking across countries. Our empirical results show that the levels of bank risk taking are lower in countries with higher levels of social capital, and that the impact of social capital is mainly reflected by the reduced value of the standard deviation of return on assets. Moreover, the impact of social capital is found to be weaker when the legal system lacks strength. Furthermore, the study considers the impacts of social capital of the banks’ largest shareholders in these countries and finds that high levels of social capital present in these countries exert a negative effect on bank risk taking, but the effect is not strongly significant. View Full-Text
Keywords: social capital; bank risk taking; trust social capital; bank risk taking; trust
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MDPI and ACS Style

Xie, W.; Ding, H.; Chong, T.T.-L. The Nexus between Social Capital and Bank Risk Taking. J. Risk Financial Manag. 2016, 9, 9.

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