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Book part
Publication date: 24 October 2013

Sheng-Hung Chen

This chapter examines the impact of banking competition, bank regulation, and the global financial crisis (GFC) of 2008–2009 on banks’ productivity changes. For the…

Abstract

This chapter examines the impact of banking competition, bank regulation, and the global financial crisis (GFC) of 2008–2009 on banks’ productivity changes. For the empirical analysis, I apply a semi-parametric two-step approach of Malmquist index estimates and bootstrap regression to a cross-country panel data of 8,451 commercial banks from 82 countries over the period 2004–2012. Empirical results show that (1) banking competition and capital regulation significantly enhance bank productivity, (2) a tighter bank supervision have a positive impact on bank productivity, and (3) bank productivity decreases during the GFC, but starts to increase as the GFC recovers. I also present consistent evidence that commercial banks in countries with better national governance have higher productivity growth before, during and after the GFC.

Details

Global Banking, Financial Markets and Crises
Type: Book
ISBN: 978-1-78350-170-0

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Article
Publication date: 16 March 2015

Nai Chiek Aik, M. Kabir Hassan, Taufiq Hassan and Shamsher Mohamed

– This paper aims to examine the productivity and spillover effect of Malaysian horizontal merger and acquisition (M&A) activities in the long run.

Abstract

Purpose

This paper aims to examine the productivity and spillover effect of Malaysian horizontal merger and acquisition (M&A) activities in the long run.

Design/methodology/approach

In terms of analytical tools, economic value added (EVA) and data envelopment analysis (DEA) are used.

Findings

The results of this study reveal that M&As in the absence of antitrust laws could be driven by managerial self-interest to create market power instead of realizing synergistic gains. Also, in Malaysia, the non-merging rival firms have significantly higher productivity improvement than the control bidder firms, and therefore, this study has identified the spillover effect as a behavior of M&A reaction.

Originality/value

This paper differs from previous studies in that it attempts not only to examine the real long-term gains of horizontal M&A activities in Malaysia but also the spillover effects of M&A activities on similar but non-merging firms.

Details

Management Research Review, vol. 38 no. 3
Type: Research Article
ISSN: 2040-8269

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Book part
Publication date: 19 March 2018

Ammar Jreisat, Hassan Hassan and Sriram Shankar

This study aims to undertake the evaluation and examination of the productivity change of the Egyptian banking sector. Using a novel data set covering 14 banks operating…

Abstract

This study aims to undertake the evaluation and examination of the productivity change of the Egyptian banking sector. Using a novel data set covering 14 banks operating in the Egyptian market from 1997 to 2013. We use a nonparametric approach (based on data envelopment analysis (DEA)) to investigate the productivity change in the Egyptian banking sector. Input-oriented Malmquist indices of productivity change are estimated with DEA to measure total factor productivity (TFP) change. The TFP changes are decomposed into the product of technological change and technical efficiency change (catch-up). In the second stage, we study potential determinants of productivity change using a regression model. We find that the Egyptian banking sector as a whole shows a productivity regress of 0.9% per year, mainly due to the technological improvements. The estimated regression model identifies some variables that significantly influence the productivity of banks in Egypt. The banks with higher loan to deposit ratio and higher returns on equity have higher productivity growth reflecting on their strong strategic and managerial skills. The size of a bank seems to be associated with an increase in productivity. The maturity of a bank (measured by age) is associated with higher productivity. The NIM and NIETA variables do not seem to be affecting the productivity of banks. Surprisingly, our results reveal that the financial crisis was negatively and statistically insignificant, hence it had no effect on the Egyptian banks.

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Article
Publication date: 4 December 2018

Dilip Ambarkhane, Ardhendu Shekhar Singh and Bhama Venkataramani

Microfinance institutions (MFIs) provide small loans and other financial services to the poor. These institutions are established for helping the poor to raise income…

Abstract

Purpose

Microfinance institutions (MFIs) provide small loans and other financial services to the poor. These institutions are established for helping the poor to raise income levels and to reduce poverty. Recently, MFIs are required to reduce their dependence on grants and subsidies. Consequently, they face conflicting objectives of improving reach and profitability. These can be achieved by improving productivity. This paper aims to investigate productivity change in 21 major MFIs in India which are rated by Credit Rating and Information Services of India Limited in 2014.

Design/methodology/approach

This paper attempts to examine total factor productivity change in 21 major Indian MFIs during the period from 2014 to 2016 using Malmquist productivity index. The inputs and outputs are selected considering objectives of outreach and financial sustainability. The authors have categorized MFIs in three categories, namely, large, medium and small, depending on asset size.

Findings

It is revealed that large MFIs are able to catch up with industry best practices by improving their systems and processes, but they need to improve scale efficiency. The Reserve Bank of India has recently initiated a policy of granting banking licenses to those financial institutions which have good outreach and are financially strong. It can be used for shortlisting MFIs before granting permission to operate as banks. The method can also be used for benchmarking them for productivity. It can also be replicated in other countries.

Originality/value

In India, MFIs are playing important role in economic development by providing microcredit to the poor. However, very few studies have been undertaken regarding productivity of MFIs in India. The present study intends to fill this gap. It will facilitate benchmarking of MFIs as competitive and sustainable financial institutions catering to the requirements of small borrowers.

Details

Indian Growth and Development Review, vol. 12 no. 1
Type: Research Article
ISSN: 1753-8254

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Article
Publication date: 14 May 2018

Tinfah Chung and Ariff Mohd

The purpose of this paper is to report how banking competition has fared ex post a major consolidation exercise completed during 2002-2004, which led to a complete…

Abstract

Purpose

The purpose of this paper is to report how banking competition has fared ex post a major consolidation exercise completed during 2002-2004, which led to a complete restructuring of the sector in Malaysia. Nothing is known about the competitiveness of banking system ex post a major consolidation of banks in any country including Malaysia, a middle-income economy.

Design/methodology/approach

The authors apply two models, the Panzar and Rosse (1997) and the Lerner index (1934). The two competitiveness measures are quite refined, well received by researchers, but has yet been applied to measure banking sector competitiveness of a middle-income country to characterize post-merger behavior using post-global-crisis data set. The data were complemented by documentary analysis, including brand documents, descriptions of internal processes and copies of employee magazine articles.

Findings

The results indicate that, after 11 years of consolidation, the banking sector is not operating under perfect or monopolistic competition. Malaysia’s banking industry continues to benefit the charter holders at increasingly lower level because a cartel-like environment still provides trade-off of competition costs before 2002/2004 with the costs from a cartel-like industry structures now. There is only a weak evidence that, in recent years, the banking sector is moving toward more competition.

Research limitations/implications

The chosen area of research is to test the response of the banking sector ex post consolidation after a crisis. It enables researcher to compare results with those of other countries and may not be generalizable.

Practical implications

The findings reported in this study using corroborating measures for the first time, appear to suggest increasing concentration from consolidation may lead to the undesirable cartel-like industry structure where the exercise of market power in the name of stability may not be welfare promoting.

Originality/value

This paper fulfills an identified need to study how the banking sector has performed ex post consolidation after a crisis.

Details

Journal of Economic Studies, vol. 45 no. 2
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 3 July 2017

Fadzlan Sufian, Fakarudin Kamarudin and Annuar Md. Nassir

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…

Abstract

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.

Details

Benchmarking: An International Journal, vol. 24 no. 5
Type: Research Article
ISSN: 1463-5771

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Article
Publication date: 1 August 2002

Richard S. Barr, Kory A. Killgo, Thomas F. Siems and Sheri Zimmel

Reviews previous research on the efficiency and performance of financial institutions and uses Siems and Barr’s (1998) data envelopment analysis (DEA) model to evaluate…

Abstract

Reviews previous research on the efficiency and performance of financial institutions and uses Siems and Barr’s (1998) data envelopment analysis (DEA) model to evaluate the relative productive efficiency of US commercial banks 1984‐1998. Explains the methodology, discusses the input and output measures used and relates bank performance measures to efficiency. Describes the CAMELS rating system used by bank examiners and regulators; and finds that banks with high efficiency scores also have strong CAMELS ratings. Summarizes the other relationship identified and recommends the use of DEA to help analysts and policy makers understand organizations in greater depth, regulators and examiners to develop monitoring tools and banks to benchmark their processes.

Details

Managerial Finance, vol. 28 no. 8
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 12 October 2015

Nyankomo Marwa and Meshach Aziakpono

– The purpose of this paper is to discuss the financial sustainability of Tanzanian saving and credit cooperatives (SACCOs).

Abstract

Purpose

The purpose of this paper is to discuss the financial sustainability of Tanzanian saving and credit cooperatives (SACCOs).

Design/methodology/approach

The data set used in this study comes from SACCOs’ audited financial reports for the year 2011. The performance was estimated using return on asset (ROA) and financial sustainability was estimated using the ratio of total expenses to total revenue. Linear regression was used to investigate the determinants of financial sustainability.

Findings

The results show that, about 61 per cent of the sample SACCOs is operationally sustainable and 51 per cent of the total sample is both operationally and financially sustainable. The average sustainability score was 127 per cent. On average, the results for profitability (measured by ROA) is higher than some of the results reported for standard microfinance in the region and globally. In terms of sustainability the result forecasts a promising future for financial cooperative business model as an alternative form of financing the poor.

Research limitations/implications

Only SACCOs with audited financial statements were included in the study, thus the conclusion is limited to SACCOs with similar characteristics. Future work might consider extending the analysis to include SACCOs with non-audited financial statements.

Practical implications

Based on the sample SACCOs can under good management can be used as a sustainable social conduit for financial access and social economic development among the poor in Tanzania.

Originality/value

This study contributes in two ways. First, it contributes towards the scanty empirical literature on the performance of SACCOs in developing countries and in Tanzania in particular. Second, it provides provocative evidence which appears to contradict earlier and more pessimistic accounts and it challenges the ontology about extending member-based microfinance.

Details

International Journal of Social Economics, vol. 42 no. 10
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 20 June 2016

Younghee Noh

The purpose of this paper is to discover and enumerate the elements of the digital library and measure how much an individual library was equipped with the characteristics…

Abstract

Purpose

The purpose of this paper is to discover and enumerate the elements of the digital library and measure how much an individual library was equipped with the characteristics of the digital library accordingly.

Design/methodology/approach

For this purpose several steps were taken. First, research on the characteristics and the representative services of the digital library were comprehensively reviewed. Second, examples of the library services that were being considered for the next generation digital library were investigated to compare with the conventional library services. Third, the elements of the conventional and the digital libraries initially extracted were examined by ten experts. These experts were composed of researchers and professors specializing in digital libraries, and career librarians who had worked in the digital library field for at least ten years. The elements were verified through discussions with them. Fourth, 19 university libraries, 16 public libraries, and 17 special libraries were selected in accordance with the verified elements of the conventional and the digital libraries to measure the digitization level of the libraries.

Findings

The following is a summary of the evaluation of the first eight evaluation items, which are covered in Part 1 of this study. The remaining five items will be covered in Part 2. First, the digitization level of the acquisition element and classification and cataloguing was significantly high. Second, book collections excluding “digital video,” reference service, library program service, and space service showed significantly conventional characteristics. Third, in the element of circulation services, the item of lending books offline and returning the books scored 92.64 and the item of lending-returning with use of smart devices and social media obtained significantly low scores. Also, the average in using the book return desk for the circulation service was 81.39, much higher than using the automatic book return machine, which scored 18.61, by a wide margin. Fourth, in the element of user services, the digital item of providing support for mobile services related to the library resources demonstrated higher scores than the conventional item, but other items showed more conventional characteristics. In particular, the item of duplication services for material scored 94.99, but other items such as support for publication/bookbinding services using digital publication tools and devices obtained significantly low scores.

Originality/value

This study is first study in the world to measure the level of digitization of the library. Therefore, hereafter, each library will be able to measure and determine its digital position based on these elements. Up to now, some research was performed in pursuit of extracting the elements of a library but it has relied solely on literature review. Comprehensive research had never been performed as in this study.

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