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Inter-industry convergence within financial services and its systemic implications

Fang, L. (2023). Inter-industry convergence within financial services and its systemic implications. (Unpublished Doctoral thesis, City, University of London)


Over the last several years, a trend of convergence within financial services has been observed.This trend, often linked to regulatory and business dynamics, has manifested, for instance, in insurers offering banking products and venturing in asset management. The antecedents and consequences of convergence are still only partially understood. The goals of this research are threefold. First, I expand on the understanding of the antecedents of convergence in financial services by considering factors that thus far have been overlooked. Second, I develop specific and actionable measures of convergence based on text analysis. Third, I study the systemic implications of convergence through the lens of systemic risk.

In the first study, I build a framework to measure text similarity at different aggregation levels, and propose novel measures. I reveal empirically the link between convergence in management attention and systemic risk in the banking industry in the context of the Covid19 Pandemic: convergence of banks’ attention to insurance industry increases across-industry systemic risk, while focusing on industry-idiosyncratic issues reduces within-industry systemic risk. Although a note of caution should be made about the generalizability of such results, my findings demonstrate that text-based methods can offer insights in predicting systemic risk.

In the second study, I borrow from management literature and the Attention-Based View to conceptualize convergence at the level of management attention. I study the impact of digitalization on the context within which management attention is situated. I develop hypotheses on the link between digitalization, management attention, and the specific focus of management attention. I test my hypotheses through advanced text-based methods in the context of the 10-K reports published by insurers, banks and pharmaceutical companies from 2006 to 2018. Analyses largely confirm that digitalization is positively related to convergence in management attention.

In the third study, I complement the second study by focusing on the macro business environment in which management attention is situated – i.e., macro business trends; threat of substitution; and management fashions. My goal is to disentangle, theoretically and empirically, the relative role of the three antecedents in the convergence of management attention. Through the application of advanced analytical tools, I find that management fashions play a prevailing role in driving convergence in management attention.

Overall, my study contributes to management literature by revealing specific antecedents of convergence in management attention and by providing concrete ways of operationalizing such constructs. It further contributes to the risk analysis literature by showing that factoring in management attention as an antecedent of systemic risk is a promising area of research. Jointly, my findings provide perspectives for policy makers and risk professionals to understand and mitigate exposure to systemic risk.

Publication Type: Thesis (Doctoral)
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management
H Social Sciences > HG Finance
Departments: Bayes Business School > Actuarial Science & Insurance
Bayes Business School > Bayes Business School Doctoral Theses
Doctoral Theses
[thumbnail of Fang Thesis 2023 PDF-A.pdf] Text - Accepted Version
This document is not freely accessible until 31 April 2026 due to copyright restrictions.


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