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This paper studies the profit efficiency of a sample of large U.S. commercial banks and explores how this performance varies with selected measures of bank risk reflecting aspects of credit risk, liquidity risk, and insolvency risk. We use a standard profit function and the stochastic frontier approach, and compare two standard functional forms – Cobb‐Douglas and translog – to assess the tradeoff between precision and parsimony. We find that profit efficiency is sensitive to credit risk and insolvency risk but not to liquidity risk or to the mix of loan products.

Using the EU‐KLEMS database for 12 countries and 16 industries, the purpose of this paper is to analyze the differences in technological capital intensity (R&D capital stock as a percentage of GVA) between industries and the evolution of inequalities between the EU‐11 and the USA, as well as between EU countries.

The authors use shift‐share analysis and a Theil inequality index to break down these inequalities and to quantify the importance of either a country or a specialization effect.

Results from the shift‐share analysis show that there was a technological gap in favor of the USA until the mid‐1990s linked to the greater accumulation of technological capital in most of the productive sectors considered, this being the main reason for the differences in technological innovation between the USA and the EU‐11. However, since 1995 a change in productive specialization has occurred, with a significant drop in the weight of lower technology‐intensive industries in the EU‐11 economy, as well as a significant drop in the weight of some medium technology‐intensive industries in the USA, accounting for the reduction in the technological gap between the EU and the USA. Results from the Theil index show that the differences in the productive structure of European countries explain most of their differences in technological capital intensity.

The study discusses the issue from the standpoint of the distribution of technological innovation across industries. The variable analyzed and constructed is R&D capital stock and not R&D expenditures. It applies a methodology (shift‐share analysis and Theil index) not commonly used to analyze technological innovation inequalities.

This paper takes the finance-growth nexus further by looking at the relationship between bank competition, financial innovations and economic growth in Ghana. The purpose of this paper is to find the causality among bank competition, financial innovations and economic growth in Ghana.

The relationship between bank competition, financial innovations and economic growth was established through the framework of the endogenous growth model. In addition, the paper employed the bound testing ARDL cointegration procedures to enable us to establish both short-run and long-run relationship between bank competition, financial innovations and economic growth. Granger causality test were also estimated to determine the direction of causality.

The results showed that, in the long run, bank competition is positively related to economic growth while financial innovation is negatively related to economic growth. In the short run, bank competition is negatively related to economic growth. By the same token, financial innovation is positively related to economic growth in the short run. In terms of causality, the results showed that there is unidirectional Granger causality from bank competition to economic growth. However, there is bidirectional Granger causality between financial innovation and economic growth.

The study therefore, recommends for more regulations toward a more competitive banking system with more innovative products tailored toward mobilization of savings and investment to growth induced sectors of the economy.

This paper provides a time series perspective to the finance-growth nexus and highlights the potential contribution of effective banking development to the economic welfare of the Ghanaian citizens.

The study aims to show how the public interest has been argued to justify the political interference in the accounting of financial entities as a tool to face a critical financial situation in a country. And to offer a different perspective of the publicness notion that focuses on the field of financial accounting for private entities.

The paper draws on legal and political arguments referred to the public interest that consider the balancing approach, and so goes beyond the traditional agency framework, to explain politicians' influence on financial reporting. The behavior of the newly elected Spanish government, which issued accounting impairment rules for banks is described, and the accounting practices of a highly politically connected financial entity—Bankia—are used to illustrate the consequences of that intervention.

The paper evidences that the government intervention, which implied non-compliance with IFRS, was in line with its economic goals, led to the financial sector bailout and avoided the rescue of the country. This is what we call “breaking rules to achieve the public interest”, which is also consistent with a big-bath behavior to justify the bailout and legitimate the decision to breach IFRS. The silence of enforcers is consistent with the balancing approach that suggests compliance costs from a breach of rules are perceived less relevant after a high-level decision.

This is a country-specific study based on a single case study that limits the generalizability of the findings.

This research provides a new angle to consider the political motivations to intervene in accounting in the private sector, as well as the enforcers' motivations to allow it. From an interdisciplinary perspective, it shows how politicians have argued the “public interest” to use (and abuse) to intervene in accounting rules, as well as to influence the accounting practice of a highly politically connected bank. It also highlights the potential long-term unintended consequences of these actions.

The purpose of this paper is to examine and compare the market power and the efficiency-stability of Islamic and conventional banks in the MENA zone and South East Asia during the 2005-2012 period.

The author applied an empirical approach in two steps. First, the author estimates the Lerner indicator, which is a measure of competition. Then, this measure is regressed and other explanatory variables on the banking “stability-efficiency” are derived simultaneously from the estimation of a stability stochastic frontier.

The author concludes that increased competition in the Islamic banking sector promotes the overall banking stability. Besides, whether there is a low or high competitiveness, the size of an Islamic bank is positively related to financial stability. However, large conventional banks operating in market with limited competitiveness become more involved in the risk behavior. The author concludes that capitalization has a positive effect on stability only in case of low competitiveness.

The originality of this research lies in the application of the stochastic frontier approach (SFA) on the Z-score indicator. This methodology enables to take into account the differences between the current and the optimum stability that each bank can achieve, thus creating a new measure of financial stability called “efficiency-stability”.