scholarly journals EBA's Capital Exercise and Technical Efficiency of the Banks

2020 ◽  
Vol 12 (4) ◽  
pp. 371-402
Author(s):  
Adhiraj Singh Rathore
Keyword(s):  
Technical Efficiency ◽  
Financial Distress ◽  
Capital Requirements ◽  
Data Envelopment ◽  
Tobit Regression ◽  
Macroeconomic Conditions ◽  
Country Level ◽  
European Banking ◽  
The Impact

This study uses a sample of 194 banks from 15 EU countries and two-stage data envelopment analysis (DEA) to provide evidence on the impact of the European Banking Authority (EBA)'s capital exercise on banks' efficiency. In the first stage of the analysis, we measure the efficiency by employing DEA. We then use Tobit regression to investigate the impact of the capital exercise on banks' technical efficiency. We estimate several specifications while controlling for bank-specific attributes and country-level characteristics accounting for macroeconomic conditions, financial development and market structure. The results indicate that EBA's capital exercise came, as a shock for the banks would be contributing towards making the banks more stable. It would be preventing banks from excessive risk-taking activities. Furthermore, it would be allowing the banks to withstand the financial distress and contributing in banks be- coming less prone to the systemic risk. The study finds that the capital requirements would be creating favourable economic conditions, which would be, affect the extent, depth and quality of financial intermediation and banking services.

Technical efficiency: the pathway to credit union cost efficiency in Ghana

2018 ◽  
Vol 44 (11) ◽  
pp. 1292-1310
Author(s):  
Benjamin Amoah ◽  
Kwaku Ohene-Asare ◽  
Godfred Alufar Bokpin ◽  
Anthony Q.Q. Aboagye
Keyword(s):  
Technical Efficiency ◽  
Cost Efficiency ◽  
Banking Sector ◽  
Returns To Scale ◽  
Credit Unions ◽  
Credit Union ◽  
Data Envelopment ◽  
Tobit Regression ◽  
Content Type ◽  
Macroeconomic Conditions

Purpose The purpose of this paper is to investigate the factors that tend to influence credit union efficiency, specifically examining cost efficiency (CE) and technical efficiency. Design/methodology/approach Using a two-stage method, the authors first estimate CE using Tones’ SBM data envelopment analysis method and technical efficiency in a variable returns to scale setting during the period 2008–2014. The authors estimate a mixed-effects and two-limit Tobit regression to examine the effect of credit union specific characteristics, banking industry and macroeconomic conditions, on efficiency. Findings Credit unions’ CE averaged 38.9 percent compared to 54.4 percent for technical efficiency. The authors find that technical efficiency does not translate into CE and vice versa. Practical implications The authors suggest that when targeting CE, credit union managers would have to make technical efficiency a priority. A monopolized and inefficient banking sector does not challenge efficiency improvement in the credit unions industry. Originality/value This study employs data from a frontier market.

scholarly journals An Analysis of Revenue Maximising Efficiency of Public Sector Banks in the Post-Reforms Period

2017 ◽  
Vol 6 (1) ◽  
pp. 111-125 ◽  
Author(s):  
Ombir Singh ◽  
Sanjeev Bansal
Keyword(s):  
Regression Analysis ◽  
Public Sector ◽  
Technical Efficiency ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Tobit Regression ◽  
Public Sector Banks ◽  
Using Data ◽  
Tobit Regression Analysis ◽  
The Impact

Abstract The paper investigates and compares the performance of the Indian public sector banks (PSBs) based on revenue maximising efficiency in the deregulation period from 2001-02 to 2012-13. Several efficiency estimates viz., overall technical efficiency, pure technical efficiency and scale efficiency of individual banks are calculated using Data Envelopment Analysis (DEA). The empirical findings indicate the presence of managerial and scale inefficiencies in the operation of the most of the PSBs. Applying the Tobit regression analysis, the paper also assesses the impact of different environmental factors, like profitability, the level of non-performing assets, size etc. on the efficiency of PSBs. It is observed that banks with high profitability, low level of non-performing assets, and relatively larger size are more technically efficient.

scholarly journals Organic Farming Increases the Technical Efficiency of Olive Farms in Italy

Agriculture ◽  
2021 ◽  
Vol 11 (3) ◽  
pp. 209
Author(s):  
Maria Raimondo ◽  
Francesco Caracciolo ◽  
Concetta Nazzaro ◽  
Giuseppe Marotta
Keyword(s):  
Organic Farming ◽  
Technical Efficiency ◽  
Stochastic Frontier ◽  
Farming System ◽  
Positive Role ◽  
Conventional Agriculture ◽  
Direct Sales ◽  
Organic Farming System ◽  
The Impact

While there is growing recognition of the positive role played by organic farming in the reduction of the negative externalities due to conventional agriculture, there is uncertainty about the effect of the latter on the economic performance of the farms. In this scenario, the present paper aims at investigating the effect of organic farming on technical efficiency in Italian olive farms. A cross-section dataset was analyzed through the stochastic frontier function, where the adoption of organic farming was explicitly modeled. Then, to obtain an unbiased estimate of the impact of organic farming on technical efficiency, a propensity score matching method was implemented. The findings reveal that organic farming increases technical efficiency in Italian olive farms by approximately 10%. The highest impact of organic farming is observed in small farms. As for the propensity to become organic, we found that the production and the direct sales of a higher quality of gross marketable output, as well as the intensity of labor and machines, increase the probability to adopt organic farming. Conversely, farm localization, the availability of family labor, and financial capital discourage conversion to the organic farming system.

Labour-use Efficiency of Assam Gramin Vikash Bank: Branch- and District-level Analysis

2021 ◽  
pp. 232102222110243
Author(s):  
Mohuya Deb Purkayastha ◽  
Joyeeta Deb ◽  
Ram Pratap Sinha
Keyword(s):  
Efficiency Score ◽  
Significant Variable ◽  
Data Envelopment ◽  
Tobit Regression ◽  
Second Stage ◽  
Time Period ◽  
Use Efficiency ◽  
The Mean ◽  
The Impact ◽  
Observation Period

The present study estimated labour-use efficiency of 48 branches of Assam Gramin Vikash Bank at its branch level, covering three districts of Barak Valley, which falls under Silchar region of the bank for the time period from 2010–2011 to 2017–2018. The study applied data envelopment analysis for estimating labour-use efficiency. In the second stage, the study applied censored Tobit regression for determining the impact of several contextual variables on efficiency. The study reveals that the mean labour-use efficiency score of the selected branches is 76% when averaged for the in-sample branches over the observation period. Results of the Tobit regression identified cluster 2 and total business of the branches as the significant factors for determining efficiency and the number of employees as a significant variable influencing inefficiency. JEL Classifications: G2, G20, G21, J3

Shareholder risk-taking incentives in the presence of contingent capital

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahmoud Fatouh ◽  
Ayowande A. McCunn
Keyword(s):  
Risk Taking ◽  
Banking System ◽  
Capital Requirements ◽  
Content Type ◽  
Basic Model ◽  
Conversion Rates ◽  
A Minor ◽  
The Impact ◽  
Practical Implications

Purpose This paper aims to present a model of shareholders’ willingness to exert effort to reduce the likelihood of bank distress and the implications of the presence of contingent convertible (CoCo) bonds in the liabilities structure of a bank. Design/methodology/approach This study presents a basic model about the moral hazard surrounding shareholders willingness to exert effort that increases the likelihood of a bank’s success. This study uses a one-shot game and so do not capture the effects of repeated interactions. Findings Consistent with the existing literature, this study shows that the direction of the wealth transfer at the conversion of CoCo bonds determines their impact on shareholder risk-taking incentives. This study also finds that “anytime” CoCos (CoCo bonds trigger-able anytime at the discretion of managers) have a minor advantage over regular CoCo bonds, and that quality of capital requirements can reduce the risk-taking incentives of shareholders. Practical implications This study argues that shareholders can also use manager-specific CoCo bonds to reduce the riskiness of the bank activities. The issuance of such bonds can increase the resilience of individual banks and the whole banking system. Regulators can use restrictions on conversion rates and/or requirements on the quality of capital to address the impact of CoCo bonds issuance on risk-taking incentives. Originality/value To model the risk-taking incentives, authors generally modify the asset processes to introduce components that reflect asymmetric information between CoCo holders and shareholders and/or managers. This paper follows a simpler method similar to that of Holmström and Tirole (1998).

scholarly journals (The impact of financial performance assessment on the quality of banking performance An applied study on the Commercial Bank of Chad in the Republic of Chad for the period (2008-2013: أثر تقويم الأداء المالي على جودة الأداء المصرفي دراسة تطبيقية على مصرف شاري التجاري بجمهورية تشاد للفترة (2008-2013م)

2017 ◽  
Vol 1 (6) ◽  
Author(s):  
Mohammed Bukhari Hassan Ali
Keyword(s):  
Commercial Bank ◽  
Financial Distress ◽  
Financial Management ◽  
Financial Analysis ◽  
High Ratio ◽  
Bank Loans ◽  
General Classification ◽  
The Republic ◽  
The Impact

The study addressed the issue of the quality of financial Shari commercial bank management and the extent of their relationship to the funding of competence, to see how the quality of financial management, and to identify its transparency when granting credit, and to identify the general classification of the bank on CAMELS index of the banking classification. Study the problem in the following questions: Are the financial and credit policies of the bank bank?. It is that the bank actually applied followed in the granting of credit financial procedures? Is bank financing of the bank efficient? Is that the bank applied to all financial regulations and decisions of the Organization of the banking business? The study sought to analyze and test the hypotheses: The bank's reliance on financial analysis to rationalize decisions granting Alaitmat lead to the efficiency of the funding. The Bank’s general classification in term of quality, liquidity adequacy, financial level of default and loan-to deposit ratio are within the good classification. The Chari commercial Bank's performance is good. Used in the study are: descriptive analytical method and the historical approach in addition to the deductive approach. The study reached the following findings: The results of the study that there is a positive relationship between the quality of financial management bank (Shari) commercial financing and efficiency, the bank loans relative to deposits above the industry the desired level standard, the bank in case of default Mali due to the high ratio of non-performing loans and by passed the industry standard, the bank is suffering from an acute shortage of liquidity, causing falter in the bank's operations. The most important recommendations of the study: the need for Shari Commercial Bank to measure and find out the loans to deposits ratio and liquidity of the bank continuously to meet the obligations and withdrawals daily is expected, should the bank not to grant loans only after making sure it fits with deposits and ensure liquidity of the bank to avoid potential financial distress, the need to seek to provide all types of banking services offered by the rest of the workforce in the country's banks.

The impact of comparative state-directed development on working conditions and employee satisfaction

2013 ◽  
Vol 19 (4) ◽  
pp. 498-518 ◽  
Author(s):  
Jonathan H Westover
Keyword(s):  
Job Satisfaction ◽  
Global Economy ◽  
Job Characteristics ◽  
Quality Of Work ◽  
Country Level ◽  
Development Framework ◽  
National Differences ◽  
Directed Development ◽  
The Impact

AbstractIn this research, I apply and extend Kohli's state-directed development framework to better understand country-level factors influencing cross-national differences in job characteristics and job satisfaction. Prior research has indicated that the nature of work has changed dramatically in recent years in response to economic shifts and an increasingly global economy. However, there is little agreement on whether the overall quality of work has improved or declined over that period and little is known about the overall comparative quality of work and job satisfaction across the global economy. In this study I use non-panel longitudinal data from the International Social Survey Program (survey questions on job characteristics and job quality) and various country-contextual variables. This article explores the impact of state-directed development on job satisfaction, first identifying and explaining the foundations of the statist literature, and then using various statistical methods to test for statistically significant impact and variation across countries.

scholarly journals Evaluating the Service Operating Efficiency and Its Determinants in Global Consulting Firms: A Metafrontier Analysis

2021 ◽  
Vol 13 (18) ◽  
pp. 10352
Author(s):  
Gowangwoo Park ◽  
Seok-Kee Lee ◽  
Kanghwa Choi
Keyword(s):  
Business Strategy ◽  
Service Industry ◽  
Sustainable Growth ◽  
Operating Efficiency ◽  
Data Envelopment ◽  
Tobit Regression ◽  
Consulting Services ◽  
Gap Ratio ◽  
Consulting Firms

Knowledge consulting services are one of the fastest growing fields in the knowledge service industry since the 2010s and have been emerging as a core area of the knowledge economy. Accordingly, consulting services are actively sought and provided in various fields, including business strategy and management, accounting, and ICT, and global consulting firms have experienced rapid growth. However, previous research evaluating the performance or service quality of knowledge consulting services is relatively scarce. In particular, there are barely any studies that apply the data envelopment analysis (DEA) model to measure the relative operating efficiencies of consulting firms in the global consulting service field. This study measured the operating efficiency of 27 global consulting firms using DEA. As global consulting firms are managed differently depending on the characteristics of the country in which they operate, the 27 global consulting firms were classified into three groups by region (USA, Europe, Asia) to measure their meta-efficiency (ME), group efficiency (GE), and technology gap ratio (TGR) and identify the causes of inefficiency at global consulting firms. The contextual variables within consulting firms that affect efficiency were analyzed using Tobit regression. Based on the analysis results, this study suggests strategies for enhancing the operating efficiency and realizing sustainable growth in global consulting firms.

Are Risk-Based Capital Requirements Detrimental to Corporate Lending?

2018 ◽  
Author(s):  
Brunella Bruno ◽  
Giacomo Nocera ◽  
Andrea Resti
Keyword(s):  
Asset Allocation ◽  
Business Models ◽  
Capital Requirements ◽  
Financial Repression ◽  
European Banking ◽  
European Banks ◽  
Corporate Loan ◽  
Capital Regulations ◽  
Asset Allocations ◽  
The Impact

In this chapter, we summarize the main results of a recent empirical research concerning European banks. We first explore the main drivers of the differences in risk-weighted assets (RWAs) across a sample of fifty large European banking groups. We then assess the impact of RWA-based capital regulations on those banks’ asset allocations in 2008–14. We find that risk weights are affected by bank size, business models, and asset mix. We also find that the adoption of internal ratings-based (IRB) approaches is an important driver of RWAs and that national segmentations explain a significant (albeit decreasing) share of the variability in risk weights. As for the impact of internal ratings on banks’ asset allocation in 2008–14, we uncover that banks using IRB approaches more extensively have reduced more (or increased less) their corporate loan portfolio. This effect is somewhat stronger for banks located in Eurozone periphery countries during the 2010–12 sovereign crisis. We do not find evidence, however, of internal models producing a reallocation from corporate loans to government exposures, suggesting that other motives prevailed in driving banks towards sovereign bonds during the Eurozone sovereign crisis, including the so-called ‘financial repression’ channel.

Does financial literacy “grease the wheels” of the loans market? A note

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fátima Sol Murta ◽  
Paulo Miguel Gama
Keyword(s):  
Financial Literacy ◽  
Commercial Banks ◽  
Negative Impact ◽  
Estimation Methods ◽  
Global Test ◽  
Content Type ◽  
Country Level ◽  
Lending Activity ◽  
The Impact

Purpose What is the impact of financial literacy on the lending activity of banks? Based on the results of the S&P Global FinLit Survey for an extensive sample of countries, this paper aims to provide the first global test for the impact of country-level financial literacy on the lending activity of commercial banks. Design/methodology/approach The authors use data on financial literacy by country from the S&P Global FinLit Survey that was completed in 2014 and lending activity and macroeconomic control variables data from the World Bank from 2015 to 2017 to estimate the cross-sectional effect of financial literacy on the importance of loans and of non-performing loans, using different estimation methods. Findings The results show that, first, financial literacy favors lending activity, contributing to enhance the importance of credit in the economy. Second, financial literacy prevents bad loans from building up, thus reducing credit risk and favoring the quality of the credit portfolio of banks. These results are robust to several controls for macroeconomic conditions and the quality of institutions. They are also robust to different estimation methods. Research limitations/implications The evidence of the positive (negative) impact of population financial literacy on the quantity (poor quality) of loans suggests that the efforts to enhance the financial literacy of the population contribute to the sustainable development of the financial sector and economic growth. Originality/value The paper extends to an international and country-level the available evidence of the consequences of the existence (or lack of) of financial literacy for the lending activity of commercial banks, focusing on the amount of credit granted and the quality of such credit. Thus, the paper provides an exploratory analysis of the impact of country-level financial literacy on the lending activities of commercial banks.

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