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This paper examines the role of cost efficiencies on efficient management of branch networks in the contemporary European commercial banking industry. The analysis, which could be generalised to other industries, indicates that larger banks are more likely to have heavily utilised branch networks than smaller banks and to exhibit fewer cost efficiencies from building more branches. The finding of this result within each country suggests the role of internal firm size regardless of competitive conditions. The similar cross-country finding suggests the impact of factors such as market structure/concentration levels and type of non-price competition. Larger banks can generate less income per unit asset deployed. Cross-border efficiency might be improved by greater use of banks with under-used networks by banks with over-used networks. Copyright Blackwell Publishing Ltd 2003.

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Purpose -The purpose of this paper is to examine whether the online auction mechanism in the USA is more effective at pricing initial public offerings (IPOs) than the traditional book building process. Design/methodology/approach -The analysis compares the performance of online auction IPOs with traditional IPOs issued in the same industry area and in the same year to assess the differences in first day mispricing and its persistence. The paper compares the characteristics of firms choosing the auction process relative to the traditional process. It also uses regression models to examine whether online auction IPOs had a significantly lower first day price increase than traditional IPOs. Findings -The results indicate that for 60 percent of the auction IPOs, over 40 percent of the traditional IPOs issued in that year and in that three-digit Standard Industry Classification (SIC) area had greater mispricing. The mispricing of online auction IPOs relative to traditional IPOs persist over time for 50-80 percent of online auction IPOs. Regression analyses controlling for industry effects, year effects, size of the issue, and type of traditional underwriter (low, medium, and high volume underwriters) suggest that the auction's first day price surges are not significantly lower than those of traditional underwriters. Moreover, high volume traditional underwriters have statistically significantly higher first day price surges than low volume traditional underwriters, supporting the theory that they intentionally misprice to benefit their preferred clients. Firms choosing the auction process tend to be smaller in terms of the number of shares of their IPO and their annual sales than firms choosing the traditional IPO process. There is some overlap in industry sector and age, although this varies by year. Originality/value -This paper suggests that the auction process may not be as efficient in pricing IPOs as was initially intended and that there are opportunities for further innovation and improvement.