scholarly journals Cost efficiency and welfare performance of banks: evidence from an emerging economy

2020 ◽  
Vol 16 (5) ◽  
pp. 549-574
Author(s):  
David Adeabah ◽  
Charles Andoh
Keyword(s):  
Least Squares ◽  
Consumer Protection ◽  
Cost Efficiency ◽  
Foreign Banks ◽  
Local Market ◽  
Reverse Causality ◽  
Welfare Gain ◽  
Content Type ◽  
Welfare Losses ◽  
Cost Efficient

PurposeThe study examines the relationship between the consequential social cost of market power (i.e. welfare performance of banks) and cost efficiency using data covering the period 2009 to 2017 from the Ghanaian banking industry.Design/methodology/approachThe study adopts the ordinary least squares (OLS), fixed effect (FE) panel regression and the quantile regression (QR) approaches to control for heterogeneity and provide increased room for policy relevance. The two-stage least squares instrumental variables (2SLS-IV) regression is used to ensure the robustness of the findings against the problem of possible reverse causality.FindingsThe results indicate a positive relationship between banks' welfare performance and cost efficiency, which suggests that greater cost efficiency hedges welfare losses. In other words, welfare gains and cost-efficient banks are not mutually exclusive. Also, the results show evidence that the sensitivity of welfare gain to cost efficiency depends on the knowledge of local market dynamics. Further, the findings from the QR estimation suggest that, but for welfare loss at low (Q.25) to the median (Q.50) quantiles, cost efficiency is a necessary and sufficient condition to hedge the welfare losses.Practical implicationsThe results demonstrate that financial consumer protection cannot be achieved without cost efficiency in the presence of both foreign banks and high market knowledge. Therefore, our paper suggests an integrated cost efficiency policy approach that has the complementary effect of a robust information sharing mechanism and incentives to hedge against welfare losses in the banking sector of emerging economies. Moreover, if welfare gain is synonymous with cost-efficient banks, then the presence of a quiet life is typical of financial consumer protection.Originality/valueThis study provides insight into the importance of cost efficiency to the public policy of financial consumer protection in an era of foreign banks' dominance. From the review of prior literature, this paper is the first to apply the QR estimation technique to examine the effect of cost efficiency throughout the conditional distribution of bank welfare performance rather than just the conditional mean effect of cost efficiency.

Mandatory CSR expenditure and stock return

2020 ◽  
Vol 28 (6) ◽  
pp. 951-975
Author(s):  
Asit Bhattacharyya ◽  
Md Lutfur Rahman
Keyword(s):  
Least Squares ◽  
Stock Returns ◽  
Least Squares Method ◽  
Negative Impact ◽  
Generalized Method Of Moments ◽  
Ordinary Least Squares ◽  
Reverse Causality ◽  
Endogeneity Bias ◽  
Content Type ◽  
The Impact

Purpose India has mandated corporate social responsibility (CSR) expenditure under Section 135 of the Indian Companies Act, 2013 – the first national jurisdiction to do so. The purpose of this paper is to examine the impact of mandated CSR expenditure on firms’ stock returns by using actual CSR spending data, whereas the previous studies mostly focus on voluntary CSR proxied by CSR scores. Design/methodology/approach The authors estimate their baseline regression by using ordinary least squares(OLS) method. Although the baseline regression involving CSR expenditure and stock returns using ordinary least squares method are estimated, endogeneity and reverse causality biases are addressed by using two-stage least squares and generalized method of moments approaches. These approaches contribute mitigating endogeneity bias and biases associated with unobserved heterogeneity and simultaneity. Findings The findings document that mandatory CSR expenditure has a negative impact on firms’ stock returns which supports the “shareholders” expense’ view. This result remain robust after controlling for endogeneity bias and the use of both standard and robust test statistics. The authors however observe that this result holds for the firms with actual CSR expenditure equal to the mandated amount but does not hold for the firms with actual CSR expenditure greater than the mandated amount. Therefore, the authors provide evidence that CSR expenditure’s impact on stock returns depends on whether firms simply comply the regulation or voluntarily chose an amount of CSR expenditure above the mandated amount. Originality/value The primary contribution is to present a valid and robust evidence of negative effect of mandated CSR spending on firms’ stock returns when the mandatory CSR spending rule is already in place. This study contributes by examining the impact of mandated CSR spending on stock during post-implementation period (2015-2017), whereas other studies by Dharampala and Khanna (2018); Kapoor and Dhamija (2017); and Mukherjee et al. (2018) mainly examined the impact of legislation on Indian CSR. The authors use mandated actual CSR expenditure, whereas previous studies mostly focus on voluntary CSR proxied by CSR scores.

scholarly journals Cost Analysis of a Novel Method for Ecological Compensation—A Study of the Translocation of Dead Wood

2021 ◽  
Vol 13 (11) ◽  
pp. 6075
Author(s):  
Ola Lindroos ◽  
Malin Söderlind ◽  
Joel Jensen ◽  
Joakim Hjältén
Keyword(s):  
Cost Efficiency ◽  
Dead Wood ◽  
Road Transportation ◽  
Ecological Value ◽  
Ecological Compensation ◽  
Work Time ◽  
Delivery Times ◽  
Novel Method ◽  
Cost Efficient ◽  
The Cost

Translocation of dead wood is a novel method for ecological compensation and restoration that could, potentially, provide a new important tool for biodiversity conservation. With this method, substrates that normally have long delivery times are instantly created in a compensation area, and ideally many of the associated dead wood dwelling organisms are translocated together with the substrates. However, to a large extent, there is a lack of knowledge about the cost efficiency of different methods of ecological compensation. Therefore, the costs for different parts of a translocation process and its dependency on some influencing factors were studied. The observed cost was 465 SEK per translocated log for the actual compensation measure, with an additional 349 SEK/log for work to enable evaluation of the translocation’s ecological results. Based on time studies, models were developed to predict required work time and costs for different transportation distances and load sizes. Those models indicated that short extraction and insertion distances for logs should be prioritized over road transportation distances to minimize costs. They also highlighted a trade-off between costs and time until a given ecological value is reached in the compensation area. The methodology used can contribute to more cost-efficient operations and, by doing so, increase the use of ecological compensation and the benefits from a given input.

When social media met commerce: a model of perceived customer value in group-buying

2016 ◽  
Vol 30 (4) ◽  
pp. 398-410 ◽  
Author(s):  
Yong-Ki Lee ◽  
Sally Y. Kim ◽  
Namho Chung ◽  
Kwanghoon Ahn ◽  
Jong-Won Lee
Keyword(s):  
Social Media ◽  
Least Squares ◽  
Significant Influence ◽  
Customer Value ◽  
Design Methodology ◽  
Social Commerce ◽  
Research Directions ◽  
Content Type ◽  
Group Buying ◽  
Perceived Customer Value

Purpose Social commerce using social media has been on the rapid increase. Among various social commerce models, group-buying has become the mainstream. There is a paucity of research related to how customers perceive value in group-buying situations. This paper aims to examine and analyze various factors that influence perceived customer value in group-buying. Design/methodology/approach Data were collected using a survey on customers who had purchased a restaurant service deal on a group-buying site. A partial least squares technique was used to estimate the model. Findings Results show that perceived customer value affects customers’ group buying intentions and that all four antecedents of perceived value (low price, valence of experience, trust in social media and reputation of the group-buying site) have a significant influence. Implications and further research directions are discussed at the end of the paper. Originality/value This study provides valuable strategic implications for social commerce firms.

Smart shopping: the adoption of grocery shopping apps

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lee-Andra Bruwer ◽  
Nkosivile Welcome Madinga ◽  
Nqobile Bundwini
Keyword(s):  
Least Squares ◽  
Partial Least Squares ◽  
Latent Variables ◽  
Moderating Effect ◽  
Ease Of Use ◽  
Perceived Usefulness ◽  
Equation Modeling ◽  
Grocery Shopping ◽  
Intention To Use ◽  
Content Type

PurposeThe purpose of this paper is to determine the key factors influencing the adoption of grocery shopping and to examine the moderating effect of education between antecedents of the adoption of grocery shopping apps and user attitude and intention to purchase.Design/methodology/approachThis study adopted partial least squares structural equation modeling (PLS-SEM) to evaluate the relationship between the latent variables: perceived usefulness, perceived ease of use, attitude and intention to use grocery shopping apps. Partial least squares multigroup analysis (PLS-MGA) was used to examine the moderating effect of education. A total of 305 grocery shopping apps users were surveyed using a structural questionnaire.FindingsThe results indicated that all the factors considered in the framework were significant in predicting the intention to use the grocery shopping apps. The findings show that education has no significant impact on any relationship.Practical implicationsA better understanding of the factors that affect the acceptance of mobile grocery shopping apps is important for developing better strategic management plans.Originality/valueThis is one of the first studies to research the adoption of grocery shopping apps in a developing country, as well as the first to focus on consumers in South Africa.

Contemporaneous or causal? Evaluating the triumvirate of insolvency risk, capitalization and efficiency in Indian commercial banking

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Navendu Prakash ◽  
Shveta Singh ◽  
Seema Sharma
Keyword(s):  
Cost Efficiency ◽  
Banking Sector ◽  
Generalized Method Of Moments ◽  
Commercial Banking ◽  
Seemingly Unrelated Regression ◽  
Bank Capital ◽  
Short Term ◽  
Content Type ◽  
Insolvency Risk

PurposeThis paper empirically examines the short-term and long-term associations between risk, capital and efficiency (R-C-E) in the Indian banking sector across 2008–2019 to answer the presence of causation or contemporaneousness in the R-C-E nexus.Design/methodology/approachThe paper focuses on three objectives. First, the authors determine short-term causality in the risk–efficiency relationship by studying the simultaneous influence of a wide array of banking risks on DEA-based technical and cost efficiency in static and dynamic situations. Second, the authors introduce bank capital and contemporaneously determine the interplay between R-C-E using seemingly unrelated regression equation (SURE) and three-staged least squares (3SLS). Last, the authors assess stability in inter-temporal associations using Granger causality in an autoregressive distributed lag (ARDL) generalized method of moments (GMM) framework.FindingsThe authors contend that high capital buffers reduce insolvency risk and increase bank stability. Technically efficient banks carry lesser equity buffers, suggesting a trade-off between capital and efficiency. However, capitalization makes banks more technically efficient but not cost-efficient, implying that over-capitalization creates cost inefficiencies, which, in line with the cost skimping hypothesis, forces banks to undertake risk. Concerning causal relationships, the authors conclude that inefficiency Granger-causes insolvency and increases bank risk. Further, steady increases in capital precede technical and cost efficiency improvements. The converse also holds as more efficient banks depict temporal increases in capitalization levels.Originality/valueThe paper is perhaps the first that acknowledges the influence of the “time” perspective on the R-C-E nexus in an emerging economy and advocates that prudential regulations must focus on short-term and long-term intricacies among the triumvirate to foster a stable banking environment.

Achieving Indonesian Oil and Gas production to 1 million barrels per day by 2030 using Nanoflooding as Novel EOR Method: Dream vs. Reality

2021 ◽  
Author(s):  
L. Hendraningrat
Keyword(s):  
Oil Recovery ◽  
Cost Efficiency ◽  
Oil And Gas ◽  
Gas Production ◽  
Oil Price ◽  
Efficient Manner ◽  
Oil And Gas Production ◽  
Cost Efficient ◽  
Nano Size ◽  
Production Target

In low oil price environments, conducting affordable enhanced oil recovery (EOR) projects can be very challenging. One item of interest for successful future EOR should be in how produced fluids are treated and how to achieve cost-efficiency. Nanoflooding, is an emerging EOR technique, which has attracted deployment in recent years. Meanwhile, Indonesia continues to progress towards the national oil and gas production target of one million barrels per day by 2030. This paper presents the observation of opportunities and challenges of using nanoflooding to enable oil and gas production in Indonesia to achieve its desired targets. The study began by mapping the pain points in major oilfields in Indonesia. We observed and discussed the advantage and limitation of traditional mature EOR techniques, status, and ongoing application of EOR in Indonesia. Then, we briefly explained the main reasons why nanoflooding can be considered for future implementation in accelerating oil production in Indonesia, including a discussion about a successful pilot test. As an emerging EOR technique, nanoflooding can be considered as a cost-efficient technique. Silica-based nanofluid can be accessed in a cost-efficient manner and can be executed from an implementation standpoint considering surface facilities. The mechanism that is introduced can help to displace incremental oil more effectively since it can go inside pore throats due to the nano-size. We observed several recognized benefits and challenges to deploy nanoflooding in Indonesia. Based on this study, nanoflooding is very attractive and has potential to be implemented.

Deviations from fundamental value and future closed-end country fund returns

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Luis Berggrun ◽  
Emilio Cardona ◽  
Edmundo Lizarzaburu
Keyword(s):  
Control Variable ◽  
Asset Returns ◽  
Weak Form ◽  
Share Price ◽  
Local Market ◽  
Impulse Response Functions ◽  
Content Type ◽  
Vector Autoregressive ◽  
Causality Tests ◽  
Fundamental Value

PurposeThis article examines whether deviations from fundamental value or closed-end country fund's discounts or premiums forecast future share price returns or net asset returns.Design/methodology/approachThe main empirical (econometric) tool is a vector autoregressive (VAR) model. The authors model share price returns and net asset returns as a function of their lagged values, the discounts or premiums, and a control variable for local market returns. The authors also conduct Dickey Fuller and Granger causality tests as well as impulse response functions.FindingsIt was found that deviations from fundamental value do predict share price returns. This predictability is contrary to weak-form market efficiency. Premiums or discounts predict net asset returns but weakly.Originality/valueThe findings point to the idea that the closed-end fund market is somewhat predictable and inefficient (in its weak form) since the market appears to be able to anticipate a fund's future returns using information contained in the premiums (or discounts). In particular, the market has the ability to anticipate future behaviour because growing premiums forecast declining share price returns for one or two periods ahead.

How does reverse factoring affect operating performance? An event study of Chinese manufacturing firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yongyi Shou ◽  
Jinan Shao ◽  
Weijiao Wang
Keyword(s):  
Event Study ◽  
Cost Efficiency ◽  
Operating Performance ◽  
Manufacturing Firms ◽  
Content Type ◽  
Performance Effect ◽  
Study Results ◽  
Operating Margin ◽  
The Impact ◽  
The Relationship

PurposeAs a popular supply chain finance (SCF) strategy, reverse factoring has been widely adopted by buyer firms. However, the extant literature provides scant empirical evidence on the performance effect of reverse factoring. The purpose of this study is to seek to narrow this gap by empirically examining the relationship between reverse factoring and operating performance and the contingency conditions of this relationship.Design/methodology/approachBased on a sample of 167 announcements of reverse factoring implementation made by publicly listed Chinese manufacturing firms between 2014 and 2018, this paper employs a long-term event study approach to analyze the operating performance effect of reverse factoring as well as the moderating effects of production and innovation capabilities.FindingsThe event study results indicate that reverse factoring has a positive effect on buyer firms' operating performance in terms of cost efficiency and operating margin. In addition, both production and innovation capabilities positively moderate the relationship between reverse factoring and operating margin. However, neither of them moderates the relationship between reverse factoring and cost efficiency.Originality/valueThis is the first study that empirically examines the impact of reverse factoring on operating performance based on secondary data. Furthermore, it sheds light on the SCF literature by providing insights into the contingency effects of production and innovation capabilities, which also extends our understanding of the application of extended resource-based view in SCF research.

Banking market structure and efficiency: an assessment of the USA and Canada

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Salah U-Din ◽  
David Tripe
Keyword(s):  
Market Structure ◽  
Market Power ◽  
Negative Impact ◽  
Positive Impact ◽  
Bank Efficiency ◽  
Content Type ◽  
Frontier Analysis ◽  
Banking Market ◽  
Cost Efficient ◽  
The Impact

PurposeThe study aims to analyze the changes in banking market structure and their impact on the bank efficiency.Design/methodology/approachThis study uses a one-stage stochastic frontier analysis (SFA) to compare the impact of the market structure and the GFC on the economic efficiency of the major banks in both countries.FindingsA significant negative impact of the GFC is observed on bank efficiency. Overall, Canadian banks posted better efficiency scores than their American counterparts. Additionally, cost-efficient banks are found to be more resilient to crises and more profit-efficient in the post-GFC period. The authors found that market power had a positive impact on the cost and profit efficiency of banks. Higher levels of equity, market power and concentration helped banks be more cost-efficient.Research limitations/implicationsOnly large banks are selected for study although it represents the majority stake of both banking sectors.Practical implicationsBanking regulators should include more measures to assess the banking market structure and performance.Originality/valueAs per the best knowledge of the authors, it is the first study to assess the change in banking market structure and efficiency of the US and Canadian banking sectors in the post-GFC period.

An evaluation of German active labour market policies: a review of the empirical evidence

2018 ◽  
Vol 7 (4) ◽  
pp. 377-410 ◽  
Author(s):  
Moritz Zoellner ◽  
Michael Fritsch ◽  
Michael Wyrwich
Keyword(s):  
Labour Market ◽  
Cost Efficiency ◽  
Design Methodology ◽  
Success Rates ◽  
Active Labour Market Policy ◽  
Content Type ◽  
Market Policy ◽  
Active Labour Market Policies ◽  
Active Labour ◽  
Future Challenges

PurposeThe purpose of this paper is to review the results of studies that investigate the most important active labour market policy (ALMP) measures in Germany. A focus is also on programmes devoted to foster entrepreneurship which can make important contributions to a country’s growth and social welfare.Design/methodology/approachThe study relies on quantitative and qualitative assessments and a comparison of results of previous studies on ALMPs.FindingsThe available evidence suggests that most ALMP measures increase labour market prospects of the participants. In particular, evaluations of the entrepreneurship promotion activities show high success rates as well as high cost efficiency. The bulk share of participants of entrepreneurship measures is still self-employed after several years and nearly one-third of these businesses had at least one employee. The authors mention problems regarding the evaluation of previous programmes and highlight future challenges of German ALMP.Originality/valueThis is the first study on ALMP that has an extensive and explicit focus on entrepreneurship-promoting programs.

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