Google search volume index and banks’ capital adequacy
Using Google searches for specific bank names, we construct the Bank Search Volume Index (BSVI) and investigate its predictive effect on banks’ capital adequacy. Based on the US bank-level financial data spanning from quarter one 2004 to quarter one 2020 and employing fixed-effects panel data analys...
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2025-12-01
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| Series: | Cogent Economics & Finance |
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| Online Access: | https://www.tandfonline.com/doi/10.1080/23322039.2025.2494163 |
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| author | Tadeo Masimengo |
| author_facet | Tadeo Masimengo |
| author_sort | Tadeo Masimengo |
| collection | DOAJ |
| description | Using Google searches for specific bank names, we construct the Bank Search Volume Index (BSVI) and investigate its predictive effect on banks’ capital adequacy. Based on the US bank-level financial data spanning from quarter one 2004 to quarter one 2020 and employing fixed-effects panel data analysis, we find that higher BSVI predicts reductions in capital adequacy. Specifically, a one standard deviation increase in BSVI forecasts a decline in capital adequacy over the next one, four, and eight quarters of 0.016 percent, 0.018 percent, and 0.011 percent, respectively. While the short-term predictive effect of BSVI agrees with various extant studies, which typically report only transient predictive power of Google Search Volume, the long-lasting predictive impact of BSVI (quarters 4 and 8) contrasts with most. Moreover, we find that when investor concerns about economic conditions rise, as measured by the Finance Stress Index (FSI), the predictive relationship between BSVI and capital adequacy reverses, consistent with the ‘flight-to-safety’ phenomenon. |
| format | Article |
| id | doaj-art-445178560d1e438e89a40f33cd236a51 |
| institution | DOAJ |
| issn | 2332-2039 |
| language | English |
| publishDate | 2025-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Economics & Finance |
| spelling | doaj-art-445178560d1e438e89a40f33cd236a512025-08-20T03:13:23ZengTaylor & Francis GroupCogent Economics & Finance2332-20392025-12-0113110.1080/23322039.2025.2494163Google search volume index and banks’ capital adequacyTadeo Masimengo0Business School, Hanyang University, Seoul, Republic of KoreaUsing Google searches for specific bank names, we construct the Bank Search Volume Index (BSVI) and investigate its predictive effect on banks’ capital adequacy. Based on the US bank-level financial data spanning from quarter one 2004 to quarter one 2020 and employing fixed-effects panel data analysis, we find that higher BSVI predicts reductions in capital adequacy. Specifically, a one standard deviation increase in BSVI forecasts a decline in capital adequacy over the next one, four, and eight quarters of 0.016 percent, 0.018 percent, and 0.011 percent, respectively. While the short-term predictive effect of BSVI agrees with various extant studies, which typically report only transient predictive power of Google Search Volume, the long-lasting predictive impact of BSVI (quarters 4 and 8) contrasts with most. Moreover, we find that when investor concerns about economic conditions rise, as measured by the Finance Stress Index (FSI), the predictive relationship between BSVI and capital adequacy reverses, consistent with the ‘flight-to-safety’ phenomenon.https://www.tandfonline.com/doi/10.1080/23322039.2025.2494163Bank search volume indexcapital adequacycapital bufferfinancial stabilityfinancial stress indexgoogle search volume |
| spellingShingle | Tadeo Masimengo Google search volume index and banks’ capital adequacy Cogent Economics & Finance Bank search volume index capital adequacy capital buffer financial stability financial stress index google search volume |
| title | Google search volume index and banks’ capital adequacy |
| title_full | Google search volume index and banks’ capital adequacy |
| title_fullStr | Google search volume index and banks’ capital adequacy |
| title_full_unstemmed | Google search volume index and banks’ capital adequacy |
| title_short | Google search volume index and banks’ capital adequacy |
| title_sort | google search volume index and banks capital adequacy |
| topic | Bank search volume index capital adequacy capital buffer financial stability financial stress index google search volume |
| url | https://www.tandfonline.com/doi/10.1080/23322039.2025.2494163 |
| work_keys_str_mv | AT tadeomasimengo googlesearchvolumeindexandbankscapitaladequacy |