scholarly journals Economic freedom and bank efficiency: does ownership and origins matter?

2014 ◽  
Vol 22 (3) ◽  
pp. 174-207 ◽  
Author(s):  
Fadzlan Sufian ◽  
Muzafar Shah Habibullah
Keyword(s):  
Empirical Evidence ◽  
Economic Freedom ◽  
Banking Sector ◽  
Negative Impact ◽  
Bank Efficiency ◽  
Content Type ◽  
Government Interventions ◽  
Money Markets ◽  
Two Stages ◽  
The Impact

Purpose – The paper aims to explore the impact of economic freedom on the efficiency of the Malaysian banking sector. Design/methodology/approach – The analysis is confined into two stages. In the first stage, the bias-corrected data envelopment analysis method is used to compute the efficiency of individual banks. Then bootstrap regressions are used to examine the impact of economic freedom on bank efficiency, while controlling for the potential impacts of contextual variables. Findings – It was found that greater freedom to start new businesses tend to impede the efficiency of banks operating in the Malaysian banking sector. The results indicate that restrictions on the activities of which banks could undertake exert negative impact on their efficiency levels. The empirical findings seem to support for official regulation and supervision of banks by setting the limits on activities which banks could undertake. In addition evidence supporting for government interventions in the foreign exchange and money markets was found. Originality/value – The purpose of the present paper is to extend the earlier works on the performance of the banking sector in a developing economy and establish empirical evidence on the impact of economic freedom. Although empirical evidence which examines the performance of banking sectors is abundant in the literature, to the best of our knowledge, virtually nothing has been published to address the impact of economic freedom.

scholarly journals Globalization and bank efficiency nexus: empirical evidence from the Malaysian banking sector

2017 ◽  
Vol 24 (5) ◽  
pp. 1269-1290 ◽  
Author(s):  
Fadzlan Sufian ◽  
Fakarudin Kamarudin ◽  
Annuar Md. Nassir
Keyword(s):  
Empirical Evidence ◽  
Financial Services ◽  
Banking Sector ◽  
Economic Globalization ◽  
Bank Efficiency ◽  
Content Type ◽  
Macroeconomic Conditions ◽  
Cultural Proximity ◽  
Political Globalization ◽  
The Impact

Purpose The purpose of this paper is to provide a new empirical evidence on the impact of economic globalization on the efficiency of the banking sector. The paper also investigates to what extent the internal (i.e. bank specific characteristics) and external (i.e. macroeconomic conditions) factors influence the efficiency of banks while controlling for the impact of the different dimensions of globalization. Design/methodology/approach The analysis is confined into two stages. In the first stage, the authors employ the bias-corrected data envelopment analysis method to compute the efficiency of individual banks during the period 1999-2012. The authors then use bootstrap regressions to examine the impact of economic globalization on bank efficiency, while controlling for the potential impacts of contextual variables. Findings The empirical findings indicate that the impacts of personal contacts, information flows, and cultural proximity seem to work in favor of Malaysian banks’ efficiency. A plausible reason could be due to the fact that capital account liberalization is usually accompanied by liberalization of the financial services sector, resulting in a greater competition and subsequently eroding monopolistic profits. The empirical findings also bring forth the importance of and political globalization in determining the efficiency of banks operating in the Malaysian banking sector. Originality/value The present study aims to provide for the first time empirical evidence on the performance of the banking sector and to establish new empirical evidence on the impact of globalization. The empirical evidence on the impact of globalization on the banking sector is completely missing from the literature.

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.

De-risking raises Caribbean banking dilemmas

2017 ◽  
Keyword(s):  
Business Models ◽  
Banking Sector ◽  
Technical Assistance ◽  
Negative Impact ◽  
Content Type ◽  
Improve Compliance ◽  
The Caribbean ◽  
Eastern Caribbean ◽  
Financing Of Terrorism ◽  
The Impact

Subject The impact of bank de-risking. Significance De-risking issues affecting the Caribbean reflect banks' re-assessment of their business models and risk exposures amid heightened regulatory attention to compliance by banks and their correspondents with global Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) guidelines. In the region, the phenomenon has led to strengthened efforts and progress in meeting the guidelines, but gaps and deficiencies remain. Impacts A negative impact on the banking sector will affect employment and investment. Countries such as Haiti will be deeply dependent on technical assistance to improve compliance. Consolidation of compliance efforts in the Eastern Caribbean may improve effectiveness.

scholarly journals Forced Mergers on Bank Efficiency and Productivity: Evidence from Semi-parametric Malmquist Productivity Index

2017 ◽  
Vol 18 (1) ◽  
pp. 19-44 ◽  
Author(s):  
Fadzlan Sufian ◽  
Fakarudin Kamarudin
Keyword(s):  
Banking Sector ◽  
Conclusive Evidence ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Bank Efficiency ◽  
Productivity Level ◽  
The Difference ◽  
Two Stages ◽  
The Impact ◽  
Efficiency And Productivity

The paper examines the impact of mergers and acquisitions on the productivity of the Malaysian banking sector. The analysis consists of two stages. Firstly, the semi-parametric Malmquist productivity index (MPI) method is applied to a [-5, +8] window to examine the efficiency and productivity of the acquiring and target banks during the pre- and post-merger periods. Secondly, as suggested by Banker and Natarajan (2008), we employ a battery of parametric and non-parametric univariate tests to examine the difference in the efficiency and productivity of the Malaysian banking sector during the pre- and post-merger periods. We find that the Malaysian banking sector has exhibited a higher total factor productivity level during the post-merger period attributed to technological progress. The empirical findings do not provide conclusive evidence on the less productive banks becoming the target for acquisitions.

Assessing the introduction of anti-money laundering regulations on bank stock valuation

2019 ◽  
Vol 22 (1) ◽  
pp. 76-88 ◽  
Author(s):  
Henry Balani
Keyword(s):  
Money Laundering ◽  
Banking Sector ◽  
Negative Impact ◽  
Positive Impact ◽  
Statistical Significance ◽  
Abnormal Returns ◽  
Content Type ◽  
The Usa ◽  
Bank Stock ◽  
The Impact

Purpose This paper aims to analyze the impact of the introduction of anti-money laundering (AML) regulations on bank stock valuations in the USA. Regulations can have a negative impact on financial returns as a result of increased operational costs, potentially driving down stock valuations and loss of profitability. However, regulations can also have a positive impact on valuations because of greater oversight and increased investor confidence. Findings are useful for assessing the market impact of future regulations. Design/methodology/approach Event studies and cross-sectional regression analysis are used to determine the impact on bank stock valuations together with specific characteristics of bank size and geographic headquarter location of the bank for identified AML regulations. Hypothesis related to the impact of the introduction of AML regulations are empirically tested based on the statistical significance of cumulative abnormal returns of markets. Findings AML regulations introduced in 1998 had a positive impact on bank stock valuations, while the USA PATRIOT Act legislation of 2001 had a negative impact. These findings suggest that recent AML regulation is a cost compliance burden for banks, where the costs of operations outweigh the benefits of improved processes. Larger banks see a more negative impact on their bank stock valuations compared to smaller banks, suggesting the market perceives greater cost and less profit for larger banks. Results also show that the location of bank’s headquarters does not significantly impact bank stock valuations. Originality/value This paper specifically focuses on the impact of AML regulations on the US banking sector, providing investors, academics and regulators additional insight on the market dynamics of regulations. Identifying whether the introduction of regulations has a significant impact on a bank’s performance will provide both banks and regulators clarity as to the net benefits associated with the current and future AML legislation.

Cybercrime: an emerging threat to the banking sector of Pakistan

2019 ◽  
Vol 26 (1) ◽  
pp. 50-60 ◽  
Author(s):  
Muhammad Shoukat Malik ◽  
Urooj Islam
Keyword(s):  
Information Security ◽  
Organizational Performance ◽  
Banking Sector ◽  
Negative Impact ◽  
Survey Design ◽  
Security Awareness ◽  
Content Type ◽  
Information Security Awareness ◽  
Hr Managers ◽  
The Impact

Purpose The purpose of this study is to gain more insight into the impact of cybercrime incidents in the banking sector of Pakistan. This study investigates the significant contribution of information security awareness on the relationship of cybercrimes and organizational performance. Design/methodology/approach The impact of cybercrime incidents on organizational performance is investigated by further exploring the moderating effects of information security awareness. A sample of 302 employees in the banking industry of Pakistan was studied by using survey design. Findings Cybercrime incidents have negative impact on organizational performance, but information security awareness weakens the negative impact of cybercrimes on organizational performance. Research limitations/implications The present study focuses on the banking sector so its finding cannot be generalized in other sectors. Further, in-depth comparative studies in other sectors with different cultural settings will help to authenticate the research findings. Practical implications Information security awareness weakens the negative impact of cybercrimes on organizational performance; therefore, it is important for banks’ HR managers to set up more security training courses to increase employees’ awareness on cybercrimes. Originality/value This study explores the impact of cybercrimes on banks’ performance with the moderating role of employees’ information security awareness. Linking these topics has created a new study within the cybercrimes discipline. The present study also enhances the understanding of employees’ role to combat the impact of cybercrimes on organizational performance.

scholarly journals Determinants of Corporate Social Responsibility Disclosure: the case of baking sector in Vietnam

2022 ◽  
Vol 19 ◽  
pp. 338-348
Author(s):  
Nguyen Thi Lien Huong ◽  
Dang Thi Minh Nguyet ◽  
Nguyen Ngoc Khanh Linh ◽  
Nguyen Thi Hien ◽  
Dinh Thi Ha
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Empirical Evidence ◽  
Banking Sector ◽  
Negative Impact ◽  
State Ownership ◽  
Corporate Social Responsibility Disclosure ◽  
Corporate Social ◽  
The Impact

This study aims to investigate the factors that influence corporate social responsibility disclosure (CSRD) in the banking sector in an emerging country. The quantitative model is estimated for a sample of banks in Vietnam for the period from 2013 to 2019. To explain the determinants of CSRD in banking, regression analysis using panel data was employed while taking bank size, bank age, financial performance, state ownership, and regulation as independent variables, and CSRD as a dependent variable. The results revealed that bank size, bank age, and regulation have positive impacts on CSRD, whereas state ownership has a negative impact, and financial performance was found to be insignificant. This study enriches the knowledge of CSRD, and it contributes empirical evidence of the impact of bank characteristics on CSRD. Particularly, empirical evidence suggests that regulation is an effective instrument for promoting the CSRD of banks in Vietnam. Therefore, the study identified the need for government regulation to increase disclosure because voluntary disclosure does not seem to be sufficient to achieve the desired results.

Impact of economic and financial crimes on economic growth in emerging and developing countries

2019 ◽  
Vol 26 (3) ◽  
pp. 910-920 ◽  
Author(s):  
Sani Abubakar Saddiq ◽  
Abu Sufian Abu Bakar
Keyword(s):  
Systematic Review ◽  
Developing Countries ◽  
Negative Impact ◽  
Meta Analysis ◽  
Eligibility Criteria ◽  
Content Type ◽  
Research Reporting ◽  
Financial Crimes ◽  
Emerging And Developing Countries ◽  
The Impact

Purpose The purpose of the study is to investigate the impact of economic and financial crimes on the economies of emerging and developing countries. Design/methodology/approach Preferred Reporting Items for Systematic review and Meta-Analysis (PRISMA) guidelines and meta-analysis of economics research reporting guidelines were used to conduct a quantitative synthesis of empirical evidence on the impact of economic and financial crimes in developing and emerging countries. Findings A total of 103 studies were searched, out of which 6 met the selection/eligibility criteria of this systematic review. The six selected studies indicated that economic and financial crimes have a negative impact in emerging and developing countries. Originality/value To the best knowledge of the authors, no published systematic review of the impact of economic and financial crimes in developing countries has been conducted to date.

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