What Do Quasi-Experiments Tell Us About the Response of Banks and Their Depositors to Natural Disasters?
Over the past two decades, more than 11,000 U.S. counties have been impacted by natural disasters. This study investigates how banks and their depositors respond to such events using a difference-in-difference-in-differences (DDD) methodology combined with coarsened exact matching (CEM). Analyzing 1...
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| Format: | Article |
| Language: | English |
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Pompea College of Business
2024-11-01
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| Series: | American Business Review |
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| Online Access: | https://digitalcommons.newhaven.edu/americanbusinessreview/vol27/iss2/9/ |
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| author | James R. Barth Kang-Bok Lee Yeosong Yoon |
| author_facet | James R. Barth Kang-Bok Lee Yeosong Yoon |
| author_sort | James R. Barth |
| collection | DOAJ |
| description | Over the past two decades, more than 11,000 U.S. counties have been impacted by natural disasters. This study investigates how banks and their depositors respond to such events using a difference-in-difference-in-differences (DDD) methodology combined with coarsened exact matching (CEM). Analyzing 1.3 million observations from 1999 to 2017, we find that natural disasters lead to a significant increase in deposit rates but do not affect the volume of deposits. Our findings suggest that banks raise deposit rates to counteract the potential withdrawal of funds, thereby maintaining stable deposit levels. This research provides new insights into the causal dynamics of deposit supply and demand in the face of natural disasters. |
| format | Article |
| id | doaj-art-3e6222bdd7db4b2983fb56c12be9a2c6 |
| institution | Kabale University |
| issn | 0743-2348 2689-8810 |
| language | English |
| publishDate | 2024-11-01 |
| publisher | Pompea College of Business |
| record_format | Article |
| series | American Business Review |
| spelling | doaj-art-3e6222bdd7db4b2983fb56c12be9a2c62024-11-13T20:46:12ZengPompea College of BusinessAmerican Business Review0743-23482689-88102024-11-0127260762210.37625/abr.27.2.607-622What Do Quasi-Experiments Tell Us About the Response of Banks and Their Depositors to Natural Disasters?James R. Barth0Kang-Bok Lee1Yeosong Yoon2Auburn University, Alabama, U.S.A Auburn University, Alabama, U.S.A University of Tampa, Florida, U.S.AOver the past two decades, more than 11,000 U.S. counties have been impacted by natural disasters. This study investigates how banks and their depositors respond to such events using a difference-in-difference-in-differences (DDD) methodology combined with coarsened exact matching (CEM). Analyzing 1.3 million observations from 1999 to 2017, we find that natural disasters lead to a significant increase in deposit rates but do not affect the volume of deposits. Our findings suggest that banks raise deposit rates to counteract the potential withdrawal of funds, thereby maintaining stable deposit levels. This research provides new insights into the causal dynamics of deposit supply and demand in the face of natural disasters.https://digitalcommons.newhaven.edu/americanbusinessreview/vol27/iss2/9/natural disastersbanksdepositsdeposit ratesdifference-in-difference-in-differencesbank branches |
| spellingShingle | James R. Barth Kang-Bok Lee Yeosong Yoon What Do Quasi-Experiments Tell Us About the Response of Banks and Their Depositors to Natural Disasters? American Business Review natural disasters banks deposits deposit rates difference-in-difference-in-differences bank branches |
| title | What Do Quasi-Experiments Tell Us About the Response of Banks and Their Depositors to Natural Disasters? |
| title_full | What Do Quasi-Experiments Tell Us About the Response of Banks and Their Depositors to Natural Disasters? |
| title_fullStr | What Do Quasi-Experiments Tell Us About the Response of Banks and Their Depositors to Natural Disasters? |
| title_full_unstemmed | What Do Quasi-Experiments Tell Us About the Response of Banks and Their Depositors to Natural Disasters? |
| title_short | What Do Quasi-Experiments Tell Us About the Response of Banks and Their Depositors to Natural Disasters? |
| title_sort | what do quasi experiments tell us about the response of banks and their depositors to natural disasters |
| topic | natural disasters banks deposits deposit rates difference-in-difference-in-differences bank branches |
| url | https://digitalcommons.newhaven.edu/americanbusinessreview/vol27/iss2/9/ |
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