Banking bad? A global field experiment on risk, reward, and regulation

Bibliographic Data

ID6230460
AuthorsMichael G Findley (0000-0002-4830-1828, Department of Government University of Texas at Austin Austin Texas USA), Daniel L Nielson (0000-0002-0279-0494, Department of Government University of Texas at Austin Austin Texas USA), J C Sharman (0000-0002-7727-1496, Department of Politics and International Studies University of Cambridge Cambridge UK)
Year2025
Volume69
Issue2
Pages545-559
Publication date2025-04-01
Open AccessYes
TypeARTICLE
VenueAmerican Journal of Political Science (JOURNAL)
Journal identifiersISSN: 0092-5853 • E-ISSN: 1540-5907
PublisherWiley (PUBLISHER • GB)
DOI10.1111/ajps.12861
OpenAlexW4393317711
LanguageEN
Citations received3
References cited20

Are banks sensitive to risk and reward in following global corporate transparency rules? Using a worldwide field experiment, this study evaluates competing predictions from expected utility, behavioralist, and institutionalist accounts. We incorporated a dozen companies around the world to make over 15,000 email solicitations asking for corporate accounts from 5000 of the world's internationally connected banks. Treatments randomize the risk profiles of different companies—by their countries’ association with corruption, terrorism, and tax evasion—and vary rewards by stating differing amounts of business revenues. The outcomes are the rates at which banks offer accounts and comply with rules on customer identification. The results suggest that banks are moderately responsive to risk—though not reward—but the magnitude of the effects is small, providing mixed evidence for conventional models and suggestive support for institutionalist accounts

Business · Economics · Field (mathematics · Monetary economics · Risk analysis (engineering · Decision-Making and Behavioral Economics · Experimental Behavioral Economics Studies · Law, Economics, and Judicial Systems · Mathematics · Psychology

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