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The purpose of this paper is to estimate the economic (namely cost, revenue and profit) efficiency and its association with intellectual capital of 37 BSE-listed Indian banks over the period 2005–2018.

This study employs truncated Tobit regression to compute the relationship between intellectual capital and estimated cost, revenue and profit efficiency using Data Envelopment Analysis (DEA) for the 37 BSE-listed Indian banks within the panel data framework.

Estimates suggest that banks’ overall annual average cost, revenue and profit efficiency are 0.4466–0.7519, 0.4825–0.8773 and 0.4905–0.8803, respectively, during the sample period. Further, Tobit regression results indicate that the aggregate intellectual capital (value-added intellectual coefficient or Modified Value-added Intellectual Capital) has a positive but minimal impact on these efficiency parameters at 1 percent significance level for the overall sample as well as public sector banks. Among all the sub-components of intellectual capital, human capital, structural capital and relational capital have a positive and moderate impact on these efficiency measures for the overall sample. Control variables, particularly bank size, are significant drivers of the estimated efficiency of banks.

Findings suggest that banks should invest adequately to enhance their overall intellectual capital to further augment these economic efficiency measures in the long run.

This study computes cost, revenue and profit efficiency of 37 BSE-listed banks based on DEA followed by intellectual capital using the Pulic approach (1998 and 2000) and the Bontis (1998) approach in the first stage. Later, it examines the dynamics between the computed efficiency parameters and intellectual capital using Tobit regression within the panel data framework.

This paper investigates why bancassurance coexists with alternative insurance distribution channels in the long run, considering the bank channel is known to involve lower costs than traditional distribution systems. It tests the product-quality hypothesis that maintains that the higher costs of some distribution systems represent expenses associated with producing higher product quality, greater service intensity and/or skills to solve principal-agent conflicts.

An analysis is conducted on firms operating in the life segment of the Spanish insurance industry over an eight-year sample period. First, the author estimates cost efficiency and profit inefficiency using data envelopment analysis. Cost efficiency enables one to evaluate if the use of the banking channel increases cost efficiency. Profit inefficiency is addressed to identify the existence/absence of product-quality differences. The performance implications of using bancassurance are analyzed by applying Heckman's two-stage random-effects regression model.

The results support the product-quality arguments. The use of banking channel was found to increase cost efficiency. However, the distribution channel/s utilized did not affect profit inefficiency.

A regulatory environment that supports the development of bancassurance enables this and alternative distribution channels to be sorted into market niches, where each system enjoys comparative advantages in order to minimize insurer costs and maximize insurer revenues. There is no single optimal insurance distribution system.

This is the first study to investigate why bancassurance coexists with alternative insurance distribution channels.

Purpose: The present study investigates how the performance of Greek bank branching varies when the external environment causes dramatic changes that are reflected in recession and capital control effects.

Design/Methodology: A unique dataset of accounting Profit and Loss statements of retail branches of a systemic Greek commercial bank, closely supervised by the European Central Bank (ECB), is utilized. A profit bootstrap Data Envelopment Analysis (DEA) model is selected to measure the bank branch efficiency. The derived efficiency estimates are analyzed through a second-stage panel data regression analysis against a set of efficiency drivers related to branch profitability, diversification of income, branch size, and branch activity.

Findings: The results indicate that recession negatively affects branch efficiency in the short and long run. The occurrence of recession significantly intensifies the efficiency premium of branch profitability, reduces the efficiency premium of diversification of income (i.e., a negative efficiency effect is recorded during the early recession period), while mitigating the generally negative efficiency effect of branch size. The analysis of efficiency effects from the deep recession period that encompasses capital controls reveals the importance of diversification of income for the improvement of profit efficiency at bank branch level.

Originality/Value: This is the first branch banking study that explores branch efficiency alteration and the dynamic of branch efficiency drivers when the economy suddenly enters recession and afterwards when conditions are becoming extremely difficult and consequently capital controls are imposed on the economy.

Prior research on the structure‐performance relationship has not investigated all of the relevant relationships among market structure, profits, prices, and explicitly calculated measures of firm efficiency. This paper replicates the four approaches in the literature, adds several innovations, and applies the analysis to banking data. We find more support for the structure‐conduct‐performance hypothesis than for the relative‐market‐power and efficient‐structure hypotheses, although the data are not fully consistent with any of these theories. We also find support for Hick's quiet‐life hypothesis, which implies that firms with market power adhere less rigorously to efficiency maximization. J.E.L. Classification Numbers G21, G28, L41, L89 The opinions expressed do not necessarily reflect those of the Board of Governors or its staff. The authors thank Dean Amel, Jim Berkovec, Myron Kwast, Nellie Liang, LenNakamura, Steve Rhoades, and participants in the meeting of the Federal Reserve System Committee on Financial Structure and Regulation for helpful comments, and Ken Cavalluzzo, Jalal Akhavein, John Leusner, and Seth Bonime for outstanding research assistance.

The purpose of this study is to examine the relationships between changes in water efficiency, profit and risk for firms in the global Consumer Packaged Goods industry. This study also aims to consider the moderating effect of operational efficiency on those relationships.

Using a sample of 155 firms with annual corporate social performance and financial performance data from Bloomberg for the years 2010–2019, this study employs first-differencing panel regression models to obtain our results.

This study finds strong evidence that operational efficiency moderates the relationships between water efficiency, profit and risk. For operationally efficient firms, increasing water efficiency increases profit and reduces risk. But for firms that are not operationally efficient, this study finds the opposite effects. These findings suggest a threshold level of operational efficiency that firms should achieve before they can reap financial benefits from increases in water efficiency.

Despite the increasing importance of water efficiency as a measure of corporate social performance, its effects on financial performance are not well studied. The relationship between operational efficiency and water efficiency has also not been examined. This work provides empirical evidence to better understand these important relationships. The major implication for managers is that operational efficiency is a foundational capability that should be developed before focusing on efforts to improve water efficiency. For operationally efficient firms, improvements in water efficiency can be an important mechanism to increase profitability and reduce risk.

The study aims to analyze the changes in banking market structure and their impact on the bank efficiency.

This study uses a one-stage stochastic frontier analysis (SFA) to compare the impact of the market structure and the GFC on the economic efficiency of the major banks in both countries.

A significant negative impact of the GFC is observed on bank efficiency. Overall, Canadian banks posted better efficiency scores than their American counterparts. Additionally, cost-efficient banks are found to be more resilient to crises and more profit-efficient in the post-GFC period. The authors found that market power had a positive impact on the cost and profit efficiency of banks. Higher levels of equity, market power and concentration helped banks be more cost-efficient.

Only large banks are selected for study although it represents the majority stake of both banking sectors.

Banking regulators should include more measures to assess the banking market structure and performance.

As per the best knowledge of the authors, it is the first study to assess the change in banking market structure and efficiency of the US and Canadian banking sectors in the post-GFC period.

The purpose of this paper is to examine the dynamics between income diversification and performance (cost, profit, revenue, technical, pure technical and scale efficiency) for 38 listed Indian banks within panel data framework during the period 2004-2005 to 2015-16.

This study computes bank’s cost, profit, revenue, technical, pure technical and scale efficiency within intermediation approach with data envelopment analysis (DEA) as a performance indicator, followed by exploring the association between income diversification and bank performance using truncated Tobit regression within panel data framework.

Tobit regression results revealed inverted U-shaped relationship between the income diversification and estimated efficiency parameters for the overall panel. Size and bank intermediation ratio seems to be a major factor in exploiting the potential benefits of income diversification. The author reconfirmed the inverted U-shaped relationship with these efficiency parameters for exclusive subsamples consisting of government-owned and private sector banks.

Inverted U-shaped relationship between the income diversification and estimated efficiency parameters suggest that banks should go for limited diversification to improve performance. Thus, regulators and banks should pursue limited diversification strategy for improving banking efficiency.

This study computes bank performance (cost, profit, revenue, technical, pure technical and scale efficiency) based on DEA followed by exploring the association between performance and income diversification for 38 Bombay stock exchange listed banks.

Empirical works on examining taxpayer compliance and judiciously targeting risky taxpayers from a population of large taxpayers are hitherto scarce. This paucity of research has been the main result of the limited set of taxpaid data available at a micro level to researchers. It is in this context, the objective of this paper is to suggest a benchmarking method, which takes into account firm‐specific, particularly governance characteristics, to identify and measure the extent of taxpayer compliance with the limited amount of data available. It is expected that this method will be of much value to tax administrations and compliance managers. Our approach to compliance is based on comparisons among taxpayers of the extent of under‐reporting of income, as well as over‐reporting of reconciliation deduction and cost items. The workability of the proposed model is demonstrated using data from the Australian services industry.

Information Technology has transformed the banking sector with respect to various systems and processes. Banks have adopted various measures to quicken their business activity and also save cost and time. That is why there has been large requirement of IT in the banking sector. The question arises whether this investment is enhancing the profitability of the bank or not. The purpose of this paper is to examine the presence of profitability paradox in Indian Banking Sector.

Data are collected from ten nationalized banks and three private sector banks from 2006 to 2013. The impact of IT expenditure on return on assets and profit efficiency is examined. Profit efficiency is determined using Stochastic Frontier Analysis. Data are collected from annual reports of the banks. Data on IT expenditure are collected through Right to Information Act 2005. Correlation and Panel Regression are used to investigate the relationship between IT expenditure and ROE or Profit Efficiency.

The findings of the paper confirm the presence of profitability paradox in the Indian Banking sector.

Extension of this study to other developing countries of the world will help to identify if any common pattern is there among the developing countries as far as productivity or profitability paradox is concerned.

There are some studies on the impact of IT on the banking sector in USA and Europe. This type of study however is rare in the context of India or for that matter other developing countries. Therefore, this paper will add new dimension to the existing literature and pave the way for future research in this area.

The purpose of this paper is to investigate the role of institutional developments – market economy, financial deepening, private sector, property rights and rule of law – affecting the bank efficiency in China.

First, profit efficiency and cost efficiency scores of banks at the firm‐year level were estimated using a stochastic efficiency frontier approach. Then the results were aggregated at the regional level. Regional differences in the timing and extent of the institutional developments impacting bank efficiency were exploited.

It was observed that most institutional variables play an important role in affecting bank efficiency and additionally banks tend to operate more efficiently in those regions with greater presence of private sector and more property rights awareness.

The data on a number of important institutional variables such as property rights and rule of law are not easily available or importantly do not vary that much across years. However, based on whatever information available, it is apparent that institutional development is crucial to bank performance and also eventual economic growth.

This paper is believed to be the first attempt to empirically examine the role of institutional factor affecting bank efficiency especially in a transition country.