Baele,L.T.M.De Bruyckere,V.De Jonghe,O.G.Vander Vennet,R.2025-02-012025-02-012014-07Baele, L T M, De Bruyckere, V, De Jonghe, O G & Vander Vennet, R 2014, 'Do stock markets discipline US bank holding companies : Just monitoring, or also influencing?', North American Journal of Economics and Finance, vol. 29, pp. 124-145. https://doi.org/10.1016/j.najef.2014.05.003ORCID: /0000-0003-4757-3829/work/12051607610.1016/j.najef.2014.05.003https://hdl.handle.net/20.500.14602/62162This paper presents evidence that bank managers adjust key strategic variables following a risk and/or valuation signal from the stock market. Banks receive a risk signal when they exhibit substantially higher (semi-)volatility compared to the best performing bank(s) with similar characteristics, and a valuation signal when they are undervalued relative to the average bank with similar characteristics. We document, using a partial adjustment model, that bank managers adjust the long-term target value of key strategic variables and the speed of adjustment towards those targets following a risk and/or negative valuation signal. We interpret this as evidence of stock market influencing. We show that our results are unlikely to be driven by indirect influencing by regulators, subordinated debtholders, retail or wholesale depositors. Finally, we show that the likelihood that banks receive a risk and/or valuation signal increases with opaqueness, managerial discretion and specialization.enginfo:eu-repo/semantics/openAccessMarket disciplineInfluencingPartial adjustmentOpaquenessBank riskSDG 10 - Reduced InequalitiesArticleGeneral rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. - Users may download and print one copy of any publication from the public portal for the purpose of private study or research. - You may not further distribute the material or use it for any profit-making activity or commercial gain - You may freely distribute the URL identifying the publication in the public portal" Take down policy If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim.https://www.scopus.com/pages/publications/849023284994876268https://research.tilburguniversity.edu/en/publications/b8371b2e-a7f1-4ede-9f4b-d48030f83096(c) Universiteit van TilburgBaele, L.T.M.De Bruyckere, V.De Jonghe, O.G.§0000-0003-4757-3829Vander Vennet, R.