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The purpose of this paper is to empirically examine the direct and indirect effects of automated teller machines (ATMs) on the performance and scope economies of the…
The purpose of this paper is to empirically examine the direct and indirect effects of automated teller machines (ATMs) on the performance and scope economies of the Japanese financial institutions.
Stochastic frontier approach is adopted to estimate banks’ cost and profit efficiency indices and to examine the relationship between inefficiency scores and the number of ATMs.
The study concludes that the banks not only minimize costs and save money by using ATMs, but also spend the saved funds on hiring highly skilled staff to introduce a better product mix which allows the banks to observe scope economies.
The findings suggest that although branches would remain a crucial interaction point for relationship banking, but given their high fixed cost, shifting routine banking transactions from the branch to low-cost electronic channels can significantly reduce costs and enhance efficiency of the financial institutions.
It is broadly recognized in China that funding risks due to a lack of sufficient financial support from banks are the most crucial constraints that prevent the growth of…
It is broadly recognized in China that funding risks due to a lack of sufficient financial support from banks are the most crucial constraints that prevent the growth of small and medium enterprises (SMEs). In developed economies, such as Japan and European countries, the relationship banking business model is commonly used to help support SMEs to deal with funding risks. In this chapter, we investigate whether the relationship banking business model can be applied in China. This chapter uses the results of a unique survey study that was conducted by Professor Hiroyuki Kato of Kobe University and Professor Tang Cheng of Chuo University. They studied 183 SMEs in Zhejiang Province in China. After cleaning the data, the final sample size for this study was 100 firms. Using this data, we estimated the ordered logistic and OLS models to examine several hypotheses regarding relationship banking. We found evidence suggesting that relationship banking can mitigate funding risks for SMEs in China. Our study suggests that, although Chinese banks are still underdeveloped in terms of providing relationship lending, promoting the relationship banking model may be a significant way to resolve the financial difficulties of Chinese SMEs. It is generally very difficult to test hypotheses regarding relationship banking in China because of a lack of relevant data about Chinese SMEs. Due to our unique data set, which contains relevant information directly provided by Chinese SMEs, we can examine these hypotheses.
The anomalous patterns in foreign exchange markets have received relatively little attention in the literature. This paper empirically investigates the Day-of-the-Week…
The anomalous patterns in foreign exchange markets have received relatively little attention in the literature. This paper empirically investigates the Day-of-the-Week effect in the yen-dollar currency market for three decades and confirms that such effect did exist for the period 1973–1989, but it disappears for the 1990s. The results remain unchanged when the business condition effect, the January effect, the holiday effect, and the first and last day of the month effect are controlled. The results suggest that financial deregulation in Japan has made foreign currency markets more efficient in recent years.
This chapter empirically investigates how banks evaluate the creditworthiness of small- and medium-sized enterprises (SMEs). Following SME loan underwriting literature…
This chapter empirically investigates how banks evaluate the creditworthiness of small- and medium-sized enterprises (SMEs). Following SME loan underwriting literature that distinguishes among different lending technologies, we test whether the typical SME bank loan is underwritten primarily based on just a single technology. We find that although financial statement lending is the most commonly used and serves as a kind of basic technology, it tends not to be used to the exclusion of other technologies. These findings imply that, at least in Japan, SME lending practice may be inconsistent with academic research on how banks underwrite loans elsewhere.