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1 – 10 of over 44000Dimitra Loukia Kolia and Simeon Papadopoulos
This paper investigates the development of efficiency and the progress of banking integration in the European Union by checking for convergence among banks of European and…
Abstract
Purpose
This paper investigates the development of efficiency and the progress of banking integration in the European Union by checking for convergence among banks of European and Eurozone countries as well as contrasting the results with those of United States banks.
Design/methodology/approach
Initially, we employ the two-stage semi-parametric double bootstrap DEA method, which absorbs the effects of possible integration barriers in the measurement of efficiency. Afterwards, we apply a panel data model, in order to investigate the process of banking integration by testing for convergence and for convergent clusters in banking efficiency.
Findings
Our main findings show that the bank efficiency of the US is considerably higher than that of the Eurozone and the European Union. Although there is no evidence of convergence across the banking groups, our results indicate the presence of club convergence. We also conclude that the US banking system is closer to convergence than the Eurozone and the European Union banks. Nevertheless, this outcome is subject to change in the future due to the fact that Eurozone and European Union banks' speed of convergence is higher than that of US banks.
Originality/value
Our survey is unique in trying to check for convergence while controlling for country-specific and bank-specific factors that affect the efficiency of European and Eurozone banks. Moreover, recent literature does not compare the convergence of efficiency of Eurozone, European and US banking. Finally, in our paper special consideration was given to the comparison of commercial, cooperative and savings banks, as subsets of our banking groups.
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Yanfei Sun and Yinan Ni
This paper aims to construct a measure of integration among global banks and examine its impact on bank insolvencies and bank crises.
Abstract
Purpose
This paper aims to construct a measure of integration among global banks and examine its impact on bank insolvencies and bank crises.
Design/methodology/approach
The authors apply principal component analysis to measure a bank’s degree of integration to the global banking market. Moreover, they test whether bank integration affects bank insolvency risk, in which they treat the equity of individual banks as a call option.
Findings
The authors find that the banking industry has become more globally integrated over the past two decades. At the individual bank level, results indicate that banks with higher integration levels have more assets, more nontraditional banking services and more interbank businesses. Overall, they find that a bank’s integration level is negatively associated with insolvency risk, which suggests that greater integration with global markets diversifies a bank’s risk. At the country level, banking systems with less integrated big banks, or more integrated smaller banks, are more stable and hence less likely to suffer a banking crisis.
Originality/value
The authors construct a novel measure of integration among global banks and examine its impact on bank insolvencies and bank crises.
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Kannyiri Banyen and Nicholas Biekpe
This paper examines the effect of both de jure and de facto measures of financial integration on bank profitability in five regional economic communities of Africa.
Abstract
Purpose
This paper examines the effect of both de jure and de facto measures of financial integration on bank profitability in five regional economic communities of Africa.
Design/methodology/approach
Using panel data from 405 banks operating in 47 African countries across five regional economic communities over 2007–2014, the study constructs a composite measure of bank profitability. The study then employs the dynamic two-step system GMM estimation technique to test the effect of both de jure and de facto measures of financial integration on bank profitability in Africa and across five sub-regional markets.
Findings
Overall, the results support a positive relationship between financial integration and overall bank profitability in Africa, except for the Arab Maghreb Union and Southern Africa Development Community.
Practical implications
The findings of this study suggest that increased financial integration in Africa directly improves bank’s overall profitability and the variations among the sub-regional markets inform tailored policy initiatives.
Originality/value
To the best of the authors' knowledge, this is the first study on Africa to employ a composite measure of bank profitability to assess its determinants. It is also the first to include both de facto and de jure financial integration measures in a single study. This is also the first largest comparative study on bank profitability in Africa.
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Cigdem Ataseven, Anand Nair and Mark Ferguson
This paper investigates the inter-relationships among supply integration, demand integration and internal integration in the context of food banking.
Abstract
Purpose
This paper investigates the inter-relationships among supply integration, demand integration and internal integration in the context of food banking.
Design/methodology/approach
This study utilizes survey data from managers at 71 different food banks in the US combined with secondary data gathered from Feeding America's website to provide model controls and an objective measure of food bank performance. The performance metric is the amount of food distributed per food insecure individual in the food bank's service area. Theoretically developed hypotheses were tested using seemingly unrelated regression techniques and a Monte Carlo simulation-based mediation analysis.
Findings
While the previous research on integration relationships on for-profit supply chains has shown that managing internal integration forms the foundation for integrating with suppliers and customers, the findings indicate that, for not-for-profit food banks, external integration should precede internal integration and that demand integration has a stronger influence on performance than supply integration.
Research limitations/implications
The heavy reliance of food banks on external partners necessitates an internal integration structure that supplements and builds upon these external relationships. The basic programs thus developed have a direct impact on the amount of food distributed per food insecure individual.
Originality/value
This paper contributes to the humanitarian supply chain management literature by analyzing supply chain integration and its performance implications in a slow onset disaster setting.
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Aims to examine the performance affects of strategic integration in retail banking services.
Abstract
Purpose
Aims to examine the performance affects of strategic integration in retail banking services.
Design/methodology/approach
Using a survey of retail banking executives, it is examined as to how the role of operations and marketing areas can assist retail banks to shape their competitive strategies.
Findings
It is found that proactiveness and competitive strategy substantially affect a retail bank's performance based on the strength of integration of operations and marketing areas.
Research limitations/implications
Research is limited to retail banking services.
Originality/value
The research broadens the scope of the strategic fit concept towards the analysis of performance effects due to functional integration in retail banks.
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Mobeen Ur Rehman and Xuan Vinh Vo
The rising interconnectedness between international banks, at one end, allow participants to share risk and diversification which leads to stable local lending and increase in…
Abstract
Purpose
The rising interconnectedness between international banks, at one end, allow participants to share risk and diversification which leads to stable local lending and increase in competitiveness, however, at the other end poses potential for volatility spillover and thereby contagion phenomena. Therefore, investigating the presence of co-integration amongst international banks can provide useful information about risk spillover in times of financial turbulence
Design/methodology/approach
The authors employ wavelet correlation and wavelet multiple cross-correlation strategies, following an initial decomposition of returns series through maximal overlap discrete wavelet transformation (MODWT).
Findings
The results indicate high integration level between Citibank and Deutsche Bank whereas potential of diversification exists between pairs of Citibank–Hong Kong and Shanghai Banking Corporation and Bank of America–Deutsche Bank, with former more evident in short- and medium-term relationship and later in long-run investment horizon. This paper carries implications for investors, fund managers and policymakers in foreseeing the prospects of contagion attributable to high level integration levels.
Practical implications
Implications for cross-border banking integration includes the presence of common lender effect which appears as a dominant factor for cross-border contagion. Therefore, banks based in different countries should focus more on funds diversification rather than borrowing much from any single creditor. Furthermore, foreign operations based on subsidiaries instead of relying on direct cross-border lending can help in reducing volatility of the foreign financial resources. Nevertheless, based on the results and significant strand of existing literature, the presence of contagion is inevitable, and therefore, a careful consideration of cross-border banking supervision and co-operation by the financial authorities can help in mitigating the volatility of global capital flows.
Originality/value
First, this study fills gap in the existing literature regarding the discussion on portfolio diversification opportunities in the banking sector. The banking sector is usually perceived as a main source of fixed income securities or financing; however, on the contrary, investors may also be interested for investments in publicly listed bank's stock. Most of the work regarding portfolio diversification revolves around capital market instruments; however, publicly listed shares of largest bank also present an avenue for diversification. Second, major fundamentals and the associated factor for banks performance are reflected in the its profits, either these profits result from large customer base or proper allocation of bank's assets, etc. Therefore, returns of these banks serve as a barometer for their performance and co-movement between any two banks can highlight the presence and extent of their underlying association. Third, the authors apply the latest extensions in wavelet techniques after decomposing returns series through the MODWT framework. This decomposition followed by wavelet estimations allow us to investigate banks integration level across different time and frequency space thereby carrying implications for both short- and long-run investors. Fourth, by analysing the presence of returns co-movements, the authors can predict the extent of plausible contagion since the recent global financial crisis of 2008–2009 used banks as the main medium of propagation of shocks. Fifth, the work presents many implications for the investment community, major trading partners associated with banks through different instruments and for policymakers so that the effect of contagion can be anticipated or at least mitigated in case of future financial turbulence.
Highlights
We investigate portfolio diversification opportunities in the banking sector.
Time-frequency returns co-movements is measures by applying wavelet multiple correlation and cross-correlation techniques on decomposed return series.
Deutsche Bank and Bank of America act as highest transmitter and recipient of volatility, respectively using the spillover approach of Diebold and Yilmaz (2012).
Citibank and Deutsche Bank exhibit high pairwise correlation indicating no diversification benefits.
Citibank exhibits high level of integration with other banks in the short- and medium-run whereas Deutsche Bank exercises high integration levels in the long-run investment period.
We investigate portfolio diversification opportunities in the banking sector.
Time-frequency returns co-movements is measures by applying wavelet multiple correlation and cross-correlation techniques on decomposed return series.
Deutsche Bank and Bank of America act as highest transmitter and recipient of volatility, respectively using the spillover approach of Diebold and Yilmaz (2012).
Citibank and Deutsche Bank exhibit high pairwise correlation indicating no diversification benefits.
Citibank exhibits high level of integration with other banks in the short- and medium-run whereas Deutsche Bank exercises high integration levels in the long-run investment period.
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Piyush Pandey, Sanjay Sehgal and Wasim Ahmad
Banks in the South Asian region are the fulcrum of economic growth and development as they provide means to development credit and working capital, trade and infrastructure…
Abstract
Purpose
Banks in the South Asian region are the fulcrum of economic growth and development as they provide means to development credit and working capital, trade and infrastructure finance and are seen as custodians of the trust in the financial system. This paper aims to study the nature of banking sector linkages for the region.
Design/methodology/approach
The dependence structure between deposits and lending rates individually for the banks of the South Asian countries are studied using time invariant and time varying family of copula functions. The degree of connectedness is further studied by Diebold and Yilmaz methodology.
Findings
Results indicate poor levels of banking integration in the region as the dependence parameter for both deposits and lending rates was around 0 for the sample countries, thereby confirming poor banking sector integration in the region.
Practical implications
Policymakers of the region are interested in the co-movements of the interest rates to understand the cross-sector risk management and any systemic risk pressures for the regional economies. Corporates in these countries are scouting out for competitive borrowing rates to lower their cost of capital.
Social implications
Rationale for examining the banking sector linkages is that the South Asian countries are at different stages of economic growth and development and this region in particular is the fastest growing region in the world and has largely increased its trade integration with the world albeit having lowest levels of intra-regional trade integration.
Originality/value
This is a first of a kind of studies to examine the banking sector linkages in South Asia.
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Paola Ferretti, Cristina Gonnella and Pierluigi Martino
Drawing insights from institutional theory, this paper aims to examine whether and to what extent banks have reconfigured their management control systems (MCSs) in response to…
Abstract
Purpose
Drawing insights from institutional theory, this paper aims to examine whether and to what extent banks have reconfigured their management control systems (MCSs) in response to growing institutional pressures towards sustainability, understood as environmental, social and governance (ESG) issues.
Design/methodology/approach
The authors conducted an exploratory study at the three largest Italian banking groups to shed light on changes made in MCSs to account for ESG issues. The analysis is based on 12 semi-structured interviews with managers from the sustainability and controls areas, as well as from other relevant operational areas particularly concerned with the integration process of ESG issues. Additionally, secondary data sources were used. The Malmi and Brown (2008) MCS framework, consisting of a package of five types of formal and informal control mechanisms, was used to structure and analyse the empirical data.
Findings
The examined banks widely implemented numerous changes to their MCSs as a response to the heightened sustainability pressures from regulatory bodies and stakeholders. In particular, with the exception of action planning, the results show an extensive integration of ESG issues into the five control mechanisms of Malmi and Brown’s framework, namely, long-term planning, cybernetic, reward/compensation, administrative and cultural controls.
Practical implications
By identifying the approaches banks followed in reconfiguring traditional MCSs, this research sheds light on how adequate MCSs can promote banks’ “sustainable behaviours”. The results can, thus, contribute to defining best practices on how MCSs can be redesigned to support the integration of ESG issues into the banks’ way of doing business.
Originality/value
Overall, the findings support the theoretical assertion that institutional pressures influence the design of banks’ MCSs, and that both formal and informal controls are necessary to ensure a real engagement towards sustainability. More specifically, this study reveals that MCSs, by encompassing both formal and informal controls, are central to enabling banks to appropriately understand, plan and control the transition towards business models fully oriented to the integration of ESG issues. Thereby, this allows banks to effectively respond to the increased stakeholder demands around ESG concerns.
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Betania Tanure and Roberto Gonzalez‐Duarte
The aim of this paper is to look at why and how HRM may take on a more strategic role within mergers and acquisitions (M&As) processes.
Abstract
Purpose
The aim of this paper is to look at why and how HRM may take on a more strategic role within mergers and acquisitions (M&As) processes.
Design/methodology/approach
The paper discusses the ABN AMRO Bank case. The Dutch bank first acquired one of the largest Brazilian banks and, later, the Brazilian subsidiary of an Italian bank. The paper seeks to understand to what extent the successful integration of the acquired banks by the acquiring one was determined by the consistency among three factors: the determining reason for the acquisition; the integration strategy adopted; and the HRM policies for the management of people.
Findings
The case has evidenced that, in processes of radical change, such as acquisitions, the president, as well as the top management of the acquiring company, has a critical role of establishing an understanding that people constitute, in fact, a key asset of the company, thereby opening avenues for HRM to assume a strategic role within companies.
Practical implications
Even though the HR managers should seek to undertake a more active and strategic role in M&As, contributing effectively to the performance of the organization, their actions are shaped by the consistency between discourse and practice of CEOs regarding the importance of people within organizations. Any disparity between this discourse and practice is likely to affect the role played by HRM within organizations.
Originality/value
This paper will be valuable for those attempting to link both streams of literature – HRM and post‐acquisition integration.
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The aim is to discuss how storytelling can be used in different ways to enlighten change processes occurring within and after a takeover situation.
Abstract
Purpose
The aim is to discuss how storytelling can be used in different ways to enlighten change processes occurring within and after a takeover situation.
Design/methodology/approach
Case study reseach based on in‐depth interviews critically examined as forms of narratives.
Findings
Storytelling gives the organisation the possibility to change its goals.
Research limitations/implications
Through storytelling analysis contradictions and limitations are provoked within the takeover process.
Practical implications
Storytelling is always about various stories, which one needs to read into practice.
Originality/value
The paper illustrates the value of aquisitions as seen through the eyes of the key players.
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