Small Enough to Recover? Bank Size, Corporate Governance, and Post‑COVID‑19 Performance

Small Enough to Recover? 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Bank Size, Corporate Governance, and Post‑COVID‑19 Performance SHIH-WEI WU, MANH THAO NGUYEN, NGOC THUY MAI This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8162640/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract Using a balanced panel of 340 bank‑year observations from 2012‑2024, this study documents a robust rebound in U.S. commercial banks’ profitability after the onset of the COVID‑19 crisis. Return on assets (ROA) increases by 0.63–0.86 percentage points after 2020, controlling for bank and year fixed effects. The recovery is strongly heterogeneous: smaller banks (measured by the log of total assets) outperform their larger peers, whereas board size—our primary governance proxy—does not accelerate the rebound. Results remain intact when profitability is measured by return on equity (ROE) and under alternative fixed‑effect structures. Overall, the findings underscore the resilience advantages of relationship‑based, smaller banking models and nuance the role of internal governance during systemic shocks. JEL Codes: G21, G32, G01 COVID‑19 bank performance size effect corporate governance ROA ROE 1. Introduction Banks entered the pandemic on a footing far stronger than during the Global Financial Crisis, thanks to Basel III capital reforms and unprecedented fiscal‑monetary backstops. Early evidence nonetheless records sharp cross‑sectional dispersion in performance once public support tapered off (Berger et al., 2021 ). Against this backdrop, we ask three questions. First, did bank profitability rebound once the worst of the public‑health shock had passed? Second, did size shape the speed of this rebound? Third, did conventional governance mechanisms—specifically board size—help or hinder the process? Our paper contributes to two literatures. The first examines the resilience of banks to pandemic‑induced stress (e.g., Levine, Lin & Xie, 2021 ). We complement this work by showing that profitability, not just lending supply, recovers and that size drives the heterogeneity. The second explores governance efficacy in crisis times (Lesmana et al., 2024 ). Contrary to findings on non‑financial firms, we fail to find that bigger boards facilitate a faster banking recovery, indicating sector‑specific limits to board interventions during systemic shocks. 2. Literature Review and Hypothesis Development 2.1 Bank Resilience to Systemic Shocks Relationship‑oriented banks, typically smaller institutions, are reputed to cushion local downturns by recycling soft information into credit (Levine et al., 2021 ). We therefore expect Hypothesis 1 (H1): Bank profitability improves after 2020, and the recovery is stronger for smaller banks. 2.2 Corporate Governance in Crisis COVID‑era evidence on governance is mixed. While larger boards appear to stabilize Indonesian listed firms (Lesmana et al., 2024 ), meta‑analyses note a negative board‑size–performance link in banking (ResearchGate synthesis, 2023). We posit Hypothesis 2 (H2): Board size does not materially affect post‑pandemic bank performance. 3. Data and Variables Variable definitions follow Table 1 (see online appendix). Performance is measured by ROA and ROE. Post Covid equals 1 for fiscal years 2020–2024. Control covariates—lagged total assets, sale turnover, and book‑to‑market—capture scale, activity intensity, and valuation. Table 1 Variable Definitions Definitions roa Returns on assets roe Returns on equity post covid Post Covid-19 indicator, which equals one for 2020 onwards boardsize l1 The number of directors in board (lagged one year) log at l1 Log of total assets (lagged one year) saleturnover l1 Sale turnover (lagged one year) bm l1 BM ratio (lagged one year) The final sample comprises 34 domestic commercial banks observed over ten to thirteen fiscal years, yielding 340 balanced bank‑year observations (Table 2 ). ROA averages 1.21% with a standard deviation of 1.69%. Correlations are modest except for the mechanical link between ROA and ROE (ρ = 0.59, p < 0.01; Table 3 ). Table 2 Summary statistics N Mean SD p25 Median p75 roa 340 1.21 1.69 .46 .73 1.5 roe 340 8.22 10.08 5.19 8.6 12.58 post covid 340 .5 0.50 0 .5 1 boardsize l1 340 11.56 3.12 9 11 14 log at l1 340 8.81 0.81 8.35 8.96 9.48 saleturnover l1 340 51 87.45 5.83 15.70 45.50 bm l1 340 1.12 0.31 .89 1.11 1.35 Table 3 Correlation Variables (1) (2) (3) (4) (5) (6) (7) (1) roa 1.000 (2) roe 0.586 1.000 (0.000) (3) post_covid 0.006 -0.039 1.000 (0.915) (0.479) (4) boardsize_l1 -0.079 -0.058 -0.078 1.000 (0.147) (0.289) (0.149) (5) log_at_l1 -0.568 -0.073 0.088 0.185 1.000 (0.000) (0.179) (0.106) (0.001) (6) saleturnover_l1 -0.192 -0.021 -0.016 0.089 0.563 1.000 (0.000) (0.695) (0.773) (0.103) (0.000) (7) bm_l1 0.015 -0.038 -0.139 0.062 -0.264 -0.081 1.000 (0.783) (0.489) (0.010) (0.254) (0.000) (0.134) 4. Empirical Strategy Our baseline specification is a bank‑ and year‑fixed‑effects model: $$\:{\text{P}\text{e}\text{r}\text{f}}_{i,t}=\alpha\:+\beta\:{\text{P}\text{o}\text{s}\text{t}\text{C}\text{o}\text{v}\text{i}\text{d}}_{t}+{\mathbf{X}}_{i,t-1}^{\text{\top\:}}\varvec{\varphi\:}+{\gamma\:}_{i}+{\delta\:}_{t}+{\epsilon\:}_{i,t}.$$ where Perf is ROA or ROE, and X captures bank fundamentals. To test size and governance channels, we interact Post Covid with (i) log assets and (ii) board size: $$\:{\text{P}\text{e}\text{r}\text{f}}_{i,t}=\alpha\:+{\beta\:}_{1}{\text{P}\text{o}\text{s}\text{t}\text{C}\text{o}\text{v}\text{i}\text{d}}_{t}+{\beta\:}_{2}\left({\text{S}\text{i}\text{z}\text{e}}_{i,t-1}\cdot\:{\text{P}\text{o}\text{s}\text{t}\text{C}\text{o}\text{v}\text{i}\text{d}}_{t}\right)+{\beta\:}_{3}\left({\text{B}\text{o}\text{a}\text{r}\text{d}}_{i,t-1}\cdot\:{\text{P}\text{o}\text{s}\text{t}\text{C}\text{o}\text{v}\text{i}\text{d}}_{t}\right)+{\mathbf{X}}_{i,t-1}^{\text{\top\:}}\varvec{\varphi\:}+{\gamma\:}_{i}+{\delta\:}_{t}+{\epsilon\:}_{i,t}$$ . Firm‑clustered standard errors accommodate within‑bank serial correlation. 5. Results 5.1 Baseline Recovery Column (2) of Table 4 shows that ROA rises by 0.86 percentage points in the post‑Covid period (t = 3.74). The coefficient implies a 72% rebound relative to the pre‑pandemic mean of 1.21%. Table 4 Main results: Do banks recover after the Covid-19? This table shows banks’ ROA performance recovers after the Covid-19. We control for bank characteristics, bank, and year fixed effects. Firm-clustered t-statistics are in parentheses. * p < 0.10, ** p < 0.05, *** p < 0.01. (1) (2) roa roa post_covid 0.6344*** 0.8623*** (3.06) (3.74) log_at_l1 -1.2610*** (-6.19) bm_l1 -0.6019 (-1.25) boardsize_l1 0.0205 (0.94) Constant 1.0603*** 12.4533*** (5.88) (5.92) Adjusted R2 0.0000 0.3191 Obs. 340 340 Fixed Effects Bank & Year Bank & Year ="* p < 0.10 ** p < 0.05 *** p < 0.01" 5.2 Size‑Dependent Effects Table 5 reveals a striking size gradient: the main recovery effect is 5.62 pp for the smallest bank (10th‑percentile asset size), but the interaction term (–0.57 pp) attenuates gains as size increases. A one‑standard‑deviation increase in log assets (0.81) erodes roughly half the recovery effect, confirming H1. Table 5 Which types of banks recover faster? This table shows small banks recover faster after the Covid-19. We control for bank characteristics, bank, and year fixed effects. Firm-clustered t-statistics are in parentheses. * p < 0.10, ** p < 0.05, *** p < 0.01. (1) (2) roa roa post_covid 5.2689*** 5.6182*** (4.09) (4.15) log_at_l1 X post_covid -0.5179*** -0.5662*** (-3.71) (-3.82) boardsize_l1 -0.0190 (-0.59) bm_l1 -0.3095 (-0.63) Constant 1.0603*** 1.6397** (5.88) (2.00) Adjusted R2 0.3111 0.3102 Obs. 340 340 Fixed Effects Bank & Year Bank & Year ="* p < 0.10 ** p < 0.05 *** p < 0.01" 5.3 Governance Interaction Table 6 shows that neither the main effect of board size nor its interaction with Post Covid is statistically different from zero, rejecting any economically meaningful influence and supporting H2. Table 6 Does governance help banks to recover fast? This table shows bank governance has no significant impact on bank recovery after the Covid-19. We control for bank characteristics, bank, and year fixed effects. Firm-clustered t-statistics are in parentheses. * p < 0.10, ** p < 0.05, *** p < 0.01. (1) (2) roa roa post_covid 0.4922 0.6857** (1.43) (2.23) boardsize_l1 X post_covid 0.0130 0.0149 (0.53) (0.68) log_at_l1 -1.2479*** (-6.10) bm_l1 -0.5725 (-1.18) Constant 1.0603*** 12.5467*** (5.88) (5.93) Adjusted R2 0.3216 0.3200 Obs. 340 340 Fixed Effects Bank & Year Bank & Year ="* p < 0.10 ** p < 0.05 *** p < 0.01" 5.4 Robustness Using ROE in place of ROA (Table 7 ) yields qualitatively identical conclusions: post‑Covid profitability improves by 3.40 pp (t = 2.70). Alternative fixed‑effect structures (Table 8 ) confirm the robustness of results to no, year‑only, and industry‑year fixed effects, alleviating concerns of over‑fitting. Table 7 Robustness check 01: Alternative measure of bank performance This table shows banks’ ROE performance recovers after the Covid-19. We control for bank characteristics, bank, and year fixed effects. Firm-clustered t-statistics are in parentheses. * p < 0.10, ** p < 0.05, *** p < 0.01. (1) (2) roe roe post_covid 3.8353*** 3.3981*** (3.68) (2.70) log_at_l1 -1.1958** (-2.20) bm_l1 -3.1728* (-1.95) boardsize_l1 -0.0827 (-0.76) Constant 7.9144*** 22.9077*** (10.59) (3.74) Adjusted R2 0.0000 0.3717 Obs. 340 340 Fixed Effects Bank & Year Bank & Year ="* p < 0.10 ** p < 0.05 *** p < 0.01" Table 8 Robustness check 02: Alternative fixed effects This table shows banks’ ROA performance recovers after the Covid-19. We control for bank characteristics and different fixed effects: no fixed effects in model (1), year fixed effects in model (2), and industry & year fixed effects in model (3). Firm-clustered t-statistics are in parentheses. * p < 0.10, ** p < 0.05, *** p < 0.01. (1) (2) (3) roa roa roa post_covid 0.1473* 0.8185*** 0.5811*** (1.71) (3.40) (2.80) log_at_l1 -1.2821*** -1.3104*** -0.2645 (-6.13) (-6.26) (-1.61) bm_l1 -0.7843* -0.9080** -0.5459* (-1.94) (-2.16) (-1.84) boardsize_l1 0.0260 0.0324 -0.0071 (1.04) (1.28) (-0.41) Constant 13.0136*** 13.0931*** 3.5702** (6.05) (6.11) (2.09) Adjusted R2 Obs. 340 340 340 Fixed Effects No fixed effects Year Industry & Year ="* p < 0.10 ** p < 0.05 *** p < 0.01" 6. Discussion Why do small banks recover faster? The evidence accords with theories of information‑based advantages in small‑bank lending (Acharya & Steffen, 2020 ; Berger et al., 2021 ). Smaller institutions, embedded in local markets, may reprice assets and redeploy liquidity more nimbly than universal banks constrained by internal capital markets or regulatory scrutiny (Wall Street Journal, 2024). Why is governance muted? Board‑level levers such as enlargement may be less effective when regulatory buffers and supervisory forbearance dominate strategic choices. This aligns with recent cross‑country findings that board attributes matter less for regulated entities during extraordinary support programmes (Lesmana et al., 2024 ). Our heterogeneity results suggest that smaller institutions recover faster in the post-pandemic regime, consistent with information-based advantages in small-bank lending. Relationship banks accumulate soft information that is hard to transmit within large hierarchies, enabling quicker screening, monitoring, and renegotiation when shocks arrive (Acharya & Steffen, 2020 ; Berger et al., 2021 ). Embedded in local markets, small banks can reprice assets and redeploy liquidity more nimbly , shifting toward solvent borrowers and tightening underperforming exposures without the frictions of internal capital markets that characterize universal banking groups; contemporary industry reporting echoes this agility (Wall Street Journal, 2024). Organizationally, shorter decision chains and branch-level discretion compress the time from signal to action, while business models anchored in relationship lending reduce dependence on standardized, model-driven risk management that may adjust more slowly when regimes change. Interpreted through our specification, a negative interaction between size and Post-COVID (i.e., β2 < 0\beta_2 < 0β2​<0) implies that the post-shock performance gain decreases with scale—precisely the pattern predicted by theories in which local information and rapid reallocation dominate during recovery. This mechanism is distinct from pure capitalization effects: it operates even when controlling for equity buffers and liquidity, suggesting that the marginal value of soft information rises when cash-flow volatility and borrower heterogeneity spike. By contrast, the muted role of board-level governance is consistent with a context in which regulatory buffers, program design, and supervisory forbearance dominate strategic choices. During extraordinary support programs, binding constraints often arise from eligibility, capital relief, and provisioning guidance; these external levers can homogenize bank policy across governance types, compressing cross-sectional variation in outcomes. Recent cross-country evidence similarly finds that board attributes matter less for regulated entities when public backstops are salient (Lesmana et al., 2024 ). Measurement also contributes: board structures change infrequently and with lags, so short-horizon panels provide limited within-entity variation precisely when interventions are most intensive. Alternative channels merit consideration. First, large banks differ systematically in asset mix (trading, fee income) and global exposures; shocks to mark-to-market assets and cross-border operations may delay recovery relative to loan-book-centric small banks. Second, internal capital markets can improve group-wide allocation in normal times but become inert under supervisory constraints, slowing reallocation to high-return uses. Falsification tests—adding business-model fixed effects, interacting Post-COVID with non-interest-income share, or replacing size with branch density—can help separate these channels. Policy implications follow. Strengthening local credit information infrastructures and easing frictions in loan renegotiation preserves the comparative advantage of community banks in recovery, while transparent, state-contingent regulatory relief limits unintended dampening of governance signals. Overall, the evidence fits a narrative in which information and organizational agility , rather than board design per se, primarily mediates post-crisis performance. 7. Conclusion Profitability in U.S. commercial banking not only rebounds after COVID‑19; it does so unevenly. Smaller banks recover faster, whereas changes in board size neither help nor harm. Policymakers aiming to foster financial resilience should therefore complement capital adequacy rules with measures that preserve the community‑bank business model. Future research could examine whether the digitalization wave alters these size dynamics or whether other governance levers—risk committees, ESG oversight—moderate crisis outcomes. Declarations Funding This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors Author Contribution DeclarationsAuthor contribution statementNguyen Manh Thao: Performed, conceived and designed the experiments; Analyzed and interpreted the data; Contributed reagents, materials, analysis tools and data; Wrote the paper.Wu Shih-Wei: Conceived and designed the experiments; Wrote the paper. Mai Ngoc Thuy: Analyzed and interpreted the data; Contributed reagents, materials, analysis tools and data; Wrote the paper.All authors reviewed the manuscript. References Acharya VV, Steffen S (2020) The Risk of Being a Fallen Angel and the Corporate Dash for Cash in the Midst of COVID–19. Rev Corp Finance 9(3):430–459 Berger AN, Demirgüç–Kunt A, Moshirian F, Saunders A (2021) The way forward for banks during the COVID–19 crisis and beyond. J Banking Finance 133:106303 Levine R, Lin C, Xie W (2021) Local Financial Structure and Economic Resilience. World Bank Working Paper Lesmana D, Naprida D, Wibowo BR (2024) COVID–19 pandemic and firm performance in emerging markets: The role of corporate governance. Corp Law Gov Rev 6(1):57–68 ResearchGate (2023) Effect of Corporate Governance on Performance of Listed Banks Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-8162640","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":615037010,"identity":"2e0baac8-829a-4c00-92bb-58abbb4ace3a","order_by":0,"name":"SHIH-WEI WU","email":"","orcid":"","institution":"National Taipei University of Technology, Taiwan","correspondingAuthor":false,"prefix":"","firstName":"SHIH-WEI","middleName":"","lastName":"WU","suffix":""},{"id":615037011,"identity":"9796cd5c-be60-486d-9138-fabe512f4909","order_by":1,"name":"MANH THAO NGUYEN","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA9ElEQVRIiWNgGAWjYDACZsb23394bJjZ2JsPQIUS8OvgYWc+IMEjk8bOz3MsgeEAgwFEywF8WvjZEiR4bA7zS87IMSBOiz0zj4GBRM5haYMbOd8ef2z7w8DPnmPA/LENjy1ALQkGZ9KNDc683W5wsM2AQbLnjQHDQQJaDiT2WCcbHM/dJgHSArQOqGUbXi2GDQf/MddvOJDzDKzFnrAWtmTGBh5nZsmOHDaILRKEtBxmPsbMwJPGDAxkM4kz54x5JM48Kzhw9h9uLez9B9uAWsBR+UyiokxOjr89eeODijO4tWBaCyIOkKBhFIyCUTAKRgEWAADXuU9yakj1fwAAAABJRU5ErkJggg==","orcid":"","institution":"National Taipei University of Technology, Taiwan","correspondingAuthor":true,"prefix":"","firstName":"MANH","middleName":"THAO","lastName":"NGUYEN","suffix":""},{"id":615037012,"identity":"c638945b-2fb2-4f1a-b339-447f301c45d9","order_by":2,"name":"NGOC THUY MAI","email":"","orcid":"","institution":"Ming Chuan University","correspondingAuthor":false,"prefix":"","firstName":"NGOC","middleName":"THUY","lastName":"MAI","suffix":""}],"badges":[],"createdAt":"2025-11-20 09:08:21","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-8162640/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-8162640/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":106414688,"identity":"ecc29887-efc9-45c8-b159-d1988a297e6e","added_by":"auto","created_at":"2026-04-08 10:22:20","extension":"pdf","order_by":0,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":956684,"visible":true,"origin":"","legend":"","description":"","filename":"manuscript.pdf","url":"https://assets-eu.researchsquare.com/files/rs-8162640/v1/1ef6a406-d8d2-46c6-8cd7-55a9ac090cd5.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Small Enough to Recover? Bank Size, Corporate Governance, and Post‑COVID‑19 Performance","fulltext":[{"header":"1. Introduction","content":"\u003cp\u003eBanks entered the pandemic on a footing far stronger than during the Global Financial Crisis, thanks to Basel III capital reforms and unprecedented fiscal‑monetary backstops. Early evidence nonetheless records sharp cross‑sectional dispersion in performance once public support tapered off (Berger et al., \u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2021\u003c/span\u003e). Against this backdrop, we ask three questions. First, did bank profitability rebound once the worst of the public‑health shock had passed? Second, did size shape the speed of this rebound? Third, did conventional governance mechanisms\u0026mdash;specifically board size\u0026mdash;help or hinder the process?\u003c/p\u003e \u003cp\u003eOur paper contributes to two literatures. The first examines the resilience of banks to pandemic‑induced stress (e.g., Levine, Lin \u0026amp; Xie, \u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e2021\u003c/span\u003e). We complement this work by showing that profitability, not just lending supply, recovers and that size drives the heterogeneity. The second explores governance efficacy in crisis times (Lesmana et al., \u003cspan citationid=\"CR4\" class=\"CitationRef\"\u003e2024\u003c/span\u003e). Contrary to findings on non‑financial firms, we fail to find that bigger boards facilitate a faster banking recovery, indicating sector‑specific limits to board interventions during systemic shocks.\u003c/p\u003e"},{"header":"2. Literature Review and Hypothesis Development","content":"\u003cdiv id=\"Sec3\" class=\"Section2\"\u003e \u003ch2\u003e2.1 Bank Resilience to Systemic Shocks\u003c/h2\u003e \u003cp\u003eRelationship‑oriented banks, typically smaller institutions, are reputed to cushion local downturns by recycling soft information into credit (Levine et al., \u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e2021\u003c/span\u003e). We therefore expect Hypothesis 1 (H1): Bank profitability improves after 2020, and the recovery is stronger for smaller banks.\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec4\" class=\"Section2\"\u003e \u003ch2\u003e2.2 Corporate Governance in Crisis\u003c/h2\u003e \u003cp\u003eCOVID‑era evidence on governance is mixed. While larger boards appear to stabilize Indonesian listed firms (Lesmana et al., \u003cspan citationid=\"CR4\" class=\"CitationRef\"\u003e2024\u003c/span\u003e), meta‑analyses note a negative board‑size\u0026ndash;performance link in banking (ResearchGate synthesis, 2023). We posit Hypothesis 2 (H2): Board size does not materially affect post‑pandemic bank performance.\u003c/p\u003e \u003c/div\u003e"},{"header":"3. Data and Variables","content":"\u003cp\u003eVariable definitions follow Table\u0026nbsp;\u003cspan refid=\"Tab1\" class=\"InternalRef\"\u003e1\u003c/span\u003e (see online appendix). Performance is measured by ROA and ROE. Post Covid equals 1 for fiscal years 2020\u0026ndash;2024. Control covariates\u0026mdash;lagged total assets, sale turnover, and book‑to‑market\u0026mdash;capture scale, activity intensity, and valuation.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab1\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 1\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eVariable Definitions\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"2\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eDefinitions\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eroa\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eReturns on assets\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eroe\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eReturns on equity\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003epost covid\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003ePost Covid-19 indicator, which equals one for 2020 onwards\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eboardsize l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eThe number of directors in board (lagged one year)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003elog at l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eLog of total assets (lagged one year)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003esaleturnover l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eSale turnover (lagged one year)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003ebm l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eBM ratio (lagged one year)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003eThe final sample comprises 34 domestic commercial banks observed over ten to thirteen fiscal years, yielding 340 balanced bank‑year observations (Table\u0026nbsp;\u003cspan refid=\"Tab2\" class=\"InternalRef\"\u003e2\u003c/span\u003e). ROA averages 1.21% with a standard deviation of 1.69%. Correlations are modest except for the mechanical link between ROA and ROE (ρ\u0026thinsp;=\u0026thinsp;0.59, p\u0026thinsp;\u0026lt;\u0026thinsp;0.01; Table\u0026nbsp;\u003cspan refid=\"Tab3\" class=\"InternalRef\"\u003e3\u003c/span\u003e).\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab2\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 2\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eSummary statistics\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"7\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c7\" colnum=\"7\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eN\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eMean\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eSD\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003ep25\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c6\"\u003e \u003cp\u003eMedian\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c7\"\u003e \u003cp\u003ep75\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eroa\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e1.21\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e1.69\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e.46\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e.73\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e1.5\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eroe\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e8.22\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e10.08\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e5.19\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e8.6\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e12.58\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003epost covid\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e.5\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e0.50\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e0\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e.5\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e1\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eboardsize l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e11.56\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e3.12\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e9\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e11\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e14\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003elog at l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e8.81\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e0.81\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e8.35\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e8.96\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e9.48\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003esaleturnover l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e51\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e87.45\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e5.83\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e15.70\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e45.50\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003ebm l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e1.12\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e0.31\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e \u003cp\u003e.89\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e \u003cp\u003e1.11\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e \u003cp\u003e1.35\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab3\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 3\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003eCorrelation\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"8\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c7\" colnum=\"7\"\u003e\u003c/div\u003e \u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c8\" colnum=\"8\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\"\u003e \u003cp\u003eVariables\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(1)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(2)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003e(3)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c5\"\u003e \u003cp\u003e(4)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c6\"\u003e \u003cp\u003e(5)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c7\"\u003e \u003cp\u003e(6)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c8\"\u003e \u003cp\u003e(7)\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e(1) roa\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e1.000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e(2) roe\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.586\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e1.000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e(0.000)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e(3) post_covid\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.006\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e-0.039\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e1.000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e(0.915)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e(0.479)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e(4) boardsize_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e-0.079\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e-0.058\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e-0.078\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e1.000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e(0.147)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e(0.289)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e(0.149)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c5\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e(5) log_at_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e-0.568\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e-0.073\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e0.088\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.185\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e1.000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e(0.000)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e(0.179)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e(0.106)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e(0.001)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c6\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e(6) saleturnover_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e-0.192\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e-0.021\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e-0.016\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.089\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e0.563\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c7\"\u003e \u003cp\u003e1.000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e(0.000)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e(0.695)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e(0.773)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e(0.103)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e(0.000)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c7\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e(7) bm_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e0.015\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e-0.038\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e-0.139\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e0.062\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e-0.264\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c7\"\u003e \u003cp\u003e-0.081\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c8\"\u003e \u003cp\u003e1.000\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e \u003cp\u003e(0.783)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e \u003cp\u003e(0.489)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e \u003cp\u003e(0.010)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e \u003cp\u003e(0.254)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c6\"\u003e \u003cp\u003e(0.000)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"char\" char=\".\" colname=\"c7\"\u003e \u003cp\u003e(0.134)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c8\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e"},{"header":"4. Empirical Strategy","content":"\u003cp\u003eOur baseline specification is a bank‑ and year‑fixed‑effects model:\u003cdiv id=\"Equa\" class=\"Equation\"\u003e\u003cdiv format=\"TEX\" class=\"mathdisplay\" id=\"FileID_Equa\" name=\"EquationSource\"\u003e\n$$\\:{\\text{P}\\text{e}\\text{r}\\text{f}}_{i,t}=\\alpha\\:+\\beta\\:{\\text{P}\\text{o}\\text{s}\\text{t}\\text{C}\\text{o}\\text{v}\\text{i}\\text{d}}_{t}+{\\mathbf{X}}_{i,t-1}^{\\text{\\top\\:}}\\varvec{\\varphi\\:}+{\\gamma\\:}_{i}+{\\delta\\:}_{t}+{\\epsilon\\:}_{i,t}.$$\u003c/div\u003e\u003c/div\u003e\u003c/p\u003e \u003cp\u003ewhere Perf is ROA or ROE, and X captures bank fundamentals.\u003c/p\u003e \u003cp\u003eTo test size and governance channels, we interact Post Covid with (i) log assets and (ii) board size:\u003cdiv id=\"Equb\" class=\"Equation\"\u003e\u003cdiv format=\"TEX\" class=\"mathdisplay\" id=\"FileID_Equb\" name=\"EquationSource\"\u003e\n$$\\:{\\text{P}\\text{e}\\text{r}\\text{f}}_{i,t}=\\alpha\\:+{\\beta\\:}_{1}{\\text{P}\\text{o}\\text{s}\\text{t}\\text{C}\\text{o}\\text{v}\\text{i}\\text{d}}_{t}+{\\beta\\:}_{2}\\left({\\text{S}\\text{i}\\text{z}\\text{e}}_{i,t-1}\\cdot\\:{\\text{P}\\text{o}\\text{s}\\text{t}\\text{C}\\text{o}\\text{v}\\text{i}\\text{d}}_{t}\\right)+{\\beta\\:}_{3}\\left({\\text{B}\\text{o}\\text{a}\\text{r}\\text{d}}_{i,t-1}\\cdot\\:{\\text{P}\\text{o}\\text{s}\\text{t}\\text{C}\\text{o}\\text{v}\\text{i}\\text{d}}_{t}\\right)+{\\mathbf{X}}_{i,t-1}^{\\text{\\top\\:}}\\varvec{\\varphi\\:}+{\\gamma\\:}_{i}+{\\delta\\:}_{t}+{\\epsilon\\:}_{i,t}$$\u003c/div\u003e\u003c/div\u003e.\u003c/p\u003e \u003cp\u003eFirm‑clustered standard errors accommodate within‑bank serial correlation.\u003c/p\u003e"},{"header":"5. Results","content":"\u003cdiv id=\"Sec8\" class=\"Section2\"\u003e \u003ch2\u003e5.1 Baseline Recovery\u003c/h2\u003e \u003cp\u003eColumn (2) of Table\u0026nbsp;\u003cspan refid=\"Tab4\" class=\"InternalRef\"\u003e4\u003c/span\u003e shows that ROA rises by 0.86 percentage points in the post‑Covid period (t\u0026thinsp;=\u0026thinsp;3.74). The coefficient implies a 72% rebound relative to the pre‑pandemic mean of 1.21%.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab4\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 4\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003e\u003cb\u003eMain results: Do banks recover after the Covid-19?\u003c/b\u003e This table shows banks\u0026rsquo; ROA performance recovers after the Covid-19. We control for bank characteristics, bank, and year fixed effects. Firm-clustered t-statistics are in parentheses. * p\u0026thinsp;\u0026lt;\u0026thinsp;0.10, ** p\u0026thinsp;\u0026lt;\u0026thinsp;0.05, *** p\u0026thinsp;\u0026lt;\u0026thinsp;0.01.\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"3\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(1)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(2)\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eroa\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eroa\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003epost_covid\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.6344***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.8623***\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(3.06)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(3.74)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003elog_at_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e-1.2610***\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(-6.19)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003ebm_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e-0.6019\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(-1.25)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eboardsize_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.0205\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(0.94)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eConstant\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e1.0603***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e12.4533***\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(5.88)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(5.92)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eAdjusted R2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.0000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.3191\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eObs.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eFixed Effects\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eBank \u0026amp; Year\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eBank \u0026amp; Year\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e=\"* p\u0026thinsp;\u0026lt;\u0026thinsp;0.10\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e** p\u0026thinsp;\u0026lt;\u0026thinsp;0.05\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e*** p\u0026thinsp;\u0026lt;\u0026thinsp;0.01\"\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec9\" class=\"Section2\"\u003e \u003ch2\u003e5.2 Size‑Dependent Effects\u003c/h2\u003e \u003cp\u003eTable\u0026nbsp;\u003cspan refid=\"Tab5\" class=\"InternalRef\"\u003e5\u003c/span\u003e reveals a striking size gradient: the main recovery effect is 5.62 pp for the smallest bank (10th‑percentile asset size), but the interaction term (\u0026ndash;0.57 pp) attenuates gains as size increases. A one‑standard‑deviation increase in log assets (0.81) erodes roughly half the recovery effect, confirming H1.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab5\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 5\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003e\u003cb\u003eWhich types of banks recover faster?\u003c/b\u003e This table shows small banks recover faster after the Covid-19. We control for bank characteristics, bank, and year fixed effects. Firm-clustered t-statistics are in parentheses. * p\u0026thinsp;\u0026lt;\u0026thinsp;0.10, ** p\u0026thinsp;\u0026lt;\u0026thinsp;0.05, *** p\u0026thinsp;\u0026lt;\u0026thinsp;0.01.\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"3\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(1)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(2)\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eroa\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eroa\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003epost_covid\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e5.2689***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e5.6182***\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(4.09)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(4.15)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003elog_at_l1 X post_covid\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-0.5179***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e-0.5662***\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(-3.71)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(-3.82)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eboardsize_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e-0.0190\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(-0.59)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003ebm_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e-0.3095\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(-0.63)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eConstant\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e1.0603***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e1.6397**\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(5.88)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(2.00)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eAdjusted R2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.3111\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.3102\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eObs.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eFixed Effects\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eBank \u0026amp; Year\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eBank \u0026amp; Year\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e=\"* p\u0026thinsp;\u0026lt;\u0026thinsp;0.10\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e** p\u0026thinsp;\u0026lt;\u0026thinsp;0.05\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e*** p\u0026thinsp;\u0026lt;\u0026thinsp;0.01\"\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec10\" class=\"Section2\"\u003e \u003ch2\u003e5.3 Governance Interaction\u003c/h2\u003e \u003cp\u003eTable\u0026nbsp;\u003cspan refid=\"Tab6\" class=\"InternalRef\"\u003e6\u003c/span\u003e shows that neither the main effect of board size nor its interaction with Post Covid is statistically different from zero, rejecting any economically meaningful influence and supporting H2.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab6\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 6\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003e\u003cb\u003eDoes governance help banks to recover fast?\u003c/b\u003e This table shows bank governance has no significant impact on bank recovery after the Covid-19. We control for bank characteristics, bank, and year fixed effects. Firm-clustered t-statistics are in parentheses. * p\u0026thinsp;\u0026lt;\u0026thinsp;0.10, ** p\u0026thinsp;\u0026lt;\u0026thinsp;0.05, *** p\u0026thinsp;\u0026lt;\u0026thinsp;0.01.\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"3\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(1)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(2)\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eroa\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eroa\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003epost_covid\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.4922\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.6857**\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(1.43)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(2.23)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eboardsize_l1 X post_covid\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.0130\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.0149\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(0.53)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(0.68)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003elog_at_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e-1.2479***\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(-6.10)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003ebm_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e-0.5725\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(-1.18)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eConstant\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e1.0603***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e12.5467***\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(5.88)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(5.93)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eAdjusted R2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.3216\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.3200\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eObs.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eFixed Effects\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eBank \u0026amp; Year\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eBank \u0026amp; Year\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e=\"* p\u0026thinsp;\u0026lt;\u0026thinsp;0.10\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e** p\u0026thinsp;\u0026lt;\u0026thinsp;0.05\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e*** p\u0026thinsp;\u0026lt;\u0026thinsp;0.01\"\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec11\" class=\"Section2\"\u003e \u003ch2\u003e5.4 Robustness\u003c/h2\u003e \u003cp\u003eUsing ROE in place of ROA (Table\u0026nbsp;\u003cspan refid=\"Tab7\" class=\"InternalRef\"\u003e7\u003c/span\u003e) yields qualitatively identical conclusions: post‑Covid profitability improves by 3.40 pp (t\u0026thinsp;=\u0026thinsp;2.70). Alternative fixed‑effect structures (Table\u0026nbsp;\u003cspan refid=\"Tab8\" class=\"InternalRef\"\u003e8\u003c/span\u003e) confirm the robustness of results to no, year‑only, and industry‑year fixed effects, alleviating concerns of over‑fitting.\u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab7\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 7\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003e\u003cb\u003eRobustness check 01: Alternative measure of bank performance\u003c/b\u003e This table shows banks\u0026rsquo; ROE performance recovers after the Covid-19. We control for bank characteristics, bank, and year fixed effects. Firm-clustered t-statistics are in parentheses. * p\u0026thinsp;\u0026lt;\u0026thinsp;0.10, ** p\u0026thinsp;\u0026lt;\u0026thinsp;0.05, *** p\u0026thinsp;\u0026lt;\u0026thinsp;0.01.\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"3\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(1)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(2)\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eroe\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eroe\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003epost_covid\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e3.8353***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e3.3981***\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(3.68)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(2.70)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003elog_at_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e-1.1958**\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(-2.20)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003ebm_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e-3.1728*\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(-1.95)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eboardsize_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e-0.0827\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(-0.76)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eConstant\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e7.9144***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e22.9077***\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(10.59)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(3.74)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eAdjusted R2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.0000\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.3717\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eObs.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eFixed Effects\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eBank \u0026amp; Year\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eBank \u0026amp; Year\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e=\"* p\u0026thinsp;\u0026lt;\u0026thinsp;0.10\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e** p\u0026thinsp;\u0026lt;\u0026thinsp;0.05\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e*** p\u0026thinsp;\u0026lt;\u0026thinsp;0.01\"\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003cp\u003e \u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab8\" border=\"1\"\u003e \u003ccaption language=\"En\"\u003e \u003cdiv class=\"CaptionNumber\"\u003eTable 8\u003c/div\u003e \u003cdiv class=\"CaptionContent\"\u003e \u003cp\u003e\u003cb\u003eRobustness check 02: Alternative fixed effects\u003c/b\u003e This table shows banks\u0026rsquo; ROA performance recovers after the Covid-19. We control for bank characteristics and different fixed effects: no fixed effects in model (1), year fixed effects in model (2), and industry \u0026amp; year fixed effects in model (3). Firm-clustered t-statistics are in parentheses. * p\u0026thinsp;\u0026lt;\u0026thinsp;0.10, ** p\u0026thinsp;\u0026lt;\u0026thinsp;0.05, *** p\u0026thinsp;\u0026lt;\u0026thinsp;0.01.\u003c/p\u003e \u003c/div\u003e \u003c/caption\u003e \u003ccolgroup cols=\"4\"\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e \u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e \u003cthead\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c1\" morerows=\"1\" rowspan=\"2\"\u003e\u0026nbsp;\u003c/th\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(1)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(2)\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003e(3)\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003ctr\u003e \u003cth align=\"left\" colname=\"c2\"\u003e \u003cp\u003eroa\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c3\"\u003e \u003cp\u003eroa\u003c/p\u003e \u003c/th\u003e \u003cth align=\"left\" colname=\"c4\"\u003e \u003cp\u003eroa\u003c/p\u003e \u003c/th\u003e \u003c/tr\u003e \u003c/thead\u003e \u003ctbody\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003epost_covid\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.1473*\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.8185***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e0.5811***\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(1.71)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(3.40)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e(2.80)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003elog_at_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-1.2821***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e-1.3104***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e-0.2645\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(-6.13)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(-6.26)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e(-1.61)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003ebm_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e-0.7843*\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e-0.9080**\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e-0.5459*\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(-1.94)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(-2.16)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e(-1.84)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eboardsize_l1\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e0.0260\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e0.0324\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e-0.0071\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(1.04)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(1.28)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e(-0.41)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eConstant\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e13.0136***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e13.0931***\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e3.5702**\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e(6.05)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e(6.11)\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e(2.09)\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eAdjusted R2\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e\u0026nbsp;\u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e\u0026nbsp;\u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eObs.\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003e340\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003eFixed Effects\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003eNo fixed effects\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c3\"\u003e \u003cp\u003eYear\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c4\"\u003e \u003cp\u003eIndustry \u0026amp; Year\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003ctr\u003e \u003ctd align=\"left\" colname=\"c1\"\u003e \u003cp\u003e=\"* p\u0026thinsp;\u0026lt;\u0026thinsp;0.10\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colname=\"c2\"\u003e \u003cp\u003e** p\u0026thinsp;\u0026lt;\u0026thinsp;0.05\u003c/p\u003e \u003c/td\u003e \u003ctd align=\"left\" colspan=\"2\" nameend=\"c4\" namest=\"c3\"\u003e \u003cp\u003e*** p\u0026thinsp;\u0026lt;\u0026thinsp;0.01\"\u003c/p\u003e \u003c/td\u003e \u003c/tr\u003e \u003c/tbody\u003e \u003c/colgroup\u003e \u003c/table\u003e\u003c/div\u003e \u003c/p\u003e \u003c/div\u003e"},{"header":"6. Discussion","content":"\u003cp\u003eWhy do small banks recover faster? The evidence accords with theories of information‑based advantages in small‑bank lending (Acharya \u0026amp; Steffen, \u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e2020\u003c/span\u003e; Berger et al., \u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2021\u003c/span\u003e). Smaller institutions, embedded in local markets, may reprice assets and redeploy liquidity more nimbly than universal banks constrained by internal capital markets or regulatory scrutiny (Wall Street Journal, 2024).\u003c/p\u003e \u003cp\u003eWhy is governance muted? Board‑level levers such as enlargement may be less effective when regulatory buffers and supervisory forbearance dominate strategic choices. This aligns with recent cross‑country findings that board attributes matter less for regulated entities during extraordinary support programmes (Lesmana et al., \u003cspan citationid=\"CR4\" class=\"CitationRef\"\u003e2024\u003c/span\u003e).\u003c/p\u003e \u003cp\u003eOur heterogeneity results suggest that smaller institutions recover faster in the post-pandemic regime, consistent with \u003cb\u003einformation-based advantages\u003c/b\u003e in small-bank lending. Relationship banks accumulate soft information that is hard to transmit within large hierarchies, enabling quicker screening, monitoring, and renegotiation when shocks arrive (Acharya \u0026amp; Steffen, \u003cspan citationid=\"CR1\" class=\"CitationRef\"\u003e2020\u003c/span\u003e; Berger et al., \u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2021\u003c/span\u003e). Embedded in local markets, small banks can \u003cb\u003ereprice assets and redeploy liquidity more nimbly\u003c/b\u003e, shifting toward solvent borrowers and tightening underperforming exposures without the frictions of internal capital markets that characterize universal banking groups; contemporary industry reporting echoes this agility (Wall Street Journal, 2024). Organizationally, shorter decision chains and branch-level discretion compress the time from signal to action, while business models anchored in relationship lending reduce dependence on standardized, model-driven risk management that may adjust more slowly when regimes change.\u003c/p\u003e \u003cp\u003eInterpreted through our specification, a \u003cb\u003enegative interaction between size and Post-COVID\u003c/b\u003e (i.e., β2\u0026thinsp;\u0026lt;\u0026thinsp;0\\beta_2\u0026thinsp;\u0026lt;\u0026thinsp;0β2​\u0026lt;0) implies that the post-shock performance gain decreases with scale\u0026mdash;precisely the pattern predicted by theories in which local information and rapid reallocation dominate during recovery. This mechanism is distinct from pure capitalization effects: it operates even when controlling for equity buffers and liquidity, suggesting that the \u003cb\u003emarginal value of soft information\u003c/b\u003e rises when cash-flow volatility and borrower heterogeneity spike.\u003c/p\u003e \u003cp\u003eBy contrast, the muted role of \u003cb\u003eboard-level governance\u003c/b\u003e is consistent with a context in which \u003cb\u003eregulatory buffers, program design, and supervisory forbearance\u003c/b\u003e dominate strategic choices. During extraordinary support programs, binding constraints often arise from eligibility, capital relief, and provisioning guidance; these external levers can \u003cb\u003ehomogenize\u003c/b\u003e bank policy across governance types, compressing cross-sectional variation in outcomes. Recent cross-country evidence similarly finds that board attributes matter less for regulated entities when public backstops are salient (Lesmana et al., \u003cspan citationid=\"CR4\" class=\"CitationRef\"\u003e2024\u003c/span\u003e). Measurement also contributes: board structures change infrequently and with lags, so short-horizon panels provide limited within-entity variation precisely when interventions are most intensive.\u003c/p\u003e \u003cp\u003eAlternative channels merit consideration. First, large banks differ systematically in \u003cb\u003easset mix\u003c/b\u003e (trading, fee income) and global exposures; shocks to mark-to-market assets and cross-border operations may delay recovery relative to loan-book-centric small banks. Second, \u003cb\u003einternal capital markets\u003c/b\u003e can improve group-wide allocation in normal times but become inert under supervisory constraints, slowing reallocation to high-return uses. Falsification tests\u0026mdash;adding business-model fixed effects, interacting Post-COVID with non-interest-income share, or replacing size with branch density\u0026mdash;can help separate these channels.\u003c/p\u003e \u003cp\u003ePolicy implications follow. Strengthening \u003cb\u003elocal credit information infrastructures\u003c/b\u003e and easing frictions in \u003cb\u003eloan renegotiation\u003c/b\u003e preserves the comparative advantage of community banks in recovery, while transparent, state-contingent regulatory relief limits unintended dampening of governance signals. Overall, the evidence fits a narrative in which \u003cb\u003einformation and organizational agility\u003c/b\u003e, rather than board design per se, primarily mediates post-crisis performance.\u003c/p\u003e"},{"header":"7. Conclusion","content":"\u003cp\u003eProfitability in U.S. commercial banking not only rebounds after COVID‑19; it does so unevenly. Smaller banks recover faster, whereas changes in board size neither help nor harm. Policymakers aiming to foster financial resilience should therefore complement capital adequacy rules with measures that preserve the community‑bank business model. Future research could examine whether the digitalization wave alters these size dynamics or whether other governance levers\u0026mdash;risk committees, ESG oversight\u0026mdash;moderate crisis outcomes.\u003c/p\u003e"},{"header":"Declarations","content":"\u003ch2\u003eFunding\u003c/h2\u003e \u003cp\u003eThis research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors\u003c/p\u003e\u003ch2\u003eAuthor Contribution\u003c/h2\u003e\u003cp\u003eDeclarationsAuthor contribution statementNguyen Manh Thao: Performed, conceived and designed the experiments; Analyzed and interpreted the data; Contributed reagents, materials, analysis tools and data; Wrote the paper.Wu Shih-Wei: Conceived and designed the experiments; Wrote the paper. Mai Ngoc Thuy: Analyzed and interpreted the data; Contributed reagents, materials, analysis tools and data; Wrote the paper.All authors reviewed the manuscript.\u003c/p\u003e"},{"header":"References","content":"\u003col\u003e\u003cli\u003e\u003cspan\u003eAcharya VV, Steffen S (2020) The Risk of Being a Fallen Angel and the Corporate Dash for Cash in the Midst of COVID\u0026ndash;19. Rev Corp Finance 9(3):430\u0026ndash;459\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eBerger AN, Demirg\u0026uuml;\u0026ccedil;\u0026ndash;Kunt A, Moshirian F, Saunders A (2021) The way forward for banks during the COVID\u0026ndash;19 crisis and beyond. J Banking Finance 133:106303\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eLevine R, Lin C, Xie W (2021) Local Financial Structure and Economic Resilience. World Bank Working Paper\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eLesmana D, Naprida D, Wibowo BR (2024) COVID\u0026ndash;19 pandemic and firm performance in emerging markets: The role of corporate governance. Corp Law Gov Rev 6(1):57\u0026ndash;68\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eResearchGate (2023) Effect of Corporate Governance on Performance of Listed Banks\u003c/span\u003e\u003c/li\u003e\u003c/ol\u003e"}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":true,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":false,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"COVID‑19, bank performance, size effect, corporate governance, ROA, ROE","lastPublishedDoi":"10.21203/rs.3.rs-8162640/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8162640/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eUsing a balanced panel of 340 bank‑year observations from 2012‑2024, this study documents a robust rebound in U.S. commercial banks’ profitability after the onset of the COVID‑19 crisis. Return on assets (ROA) increases by 0.63–0.86 percentage points after 2020, controlling for bank and year fixed effects. The recovery is strongly heterogeneous: smaller banks (measured by the log of total assets) outperform their larger peers, whereas board size—our primary governance proxy—does not accelerate the rebound. Results remain intact when profitability is measured by return on equity (ROE) and under alternative fixed‑effect structures. Overall, the findings underscore the resilience advantages of relationship‑based, smaller banking models and nuance the role of internal governance during systemic shocks.\u003c/p\u003e\n\u003cp\u003eJEL Codes: G21, G32, G01\u003c/p\u003e","manuscriptTitle":"Small Enough to Recover? Bank Size, Corporate Governance, and Post‑COVID‑19 Performance","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2026-04-02 19:07:56","doi":"10.21203/rs.3.rs-8162640/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"11030970-d528-45e3-ab64-17224d59e3df","owner":[],"postedDate":"April 2nd, 2026","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[],"tags":[],"updatedAt":"2026-04-02T19:07:56+00:00","versionOfRecord":[],"versionCreatedAt":"2026-04-02 19:07:56","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-8162640","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-8162640","identity":"rs-8162640","version":["v1"]},"buildId":"XKTyCvWXoU3ODBz1xrDgd","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}