An empirical investigation of the effects of competition, efficiency and risk-taking on profitability: An application in Indian banking

Rakshit, Bijoy; Bardhan, Samaresh

doi:10.1016/j.jeconbus.2021.106022

Cited by 32 publications

(21 citation statements)

References 64 publications

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Section: Methodsmentioning

confidence: 99%

“…Since the inception of liberalization of Indian economy in the 1990s, Indian banking industry has undergone multifarious reforms, which are basically targeted to create a more efficient, competitive, diversified and profitable banking system Bardhan, 2019, Rakshit andBardhan, 2022). The private banks have earmarked their presence in the Indian financial services sector by adopting customer service-oriented approach (Patel et al, 2020), which guarantees superior quality services, advanced information and communication technology (ICT), provision of noncore services, hiring professionals, better customer experience and impressive career progression.…”

Section: The Research Contextmentioning

confidence: 99%

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Fostering engagement among emotionally exhausted frontline employees in financial services sector

Sahi

Singh

2022

JSTP

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PurposeThis study investigates the role of personal resource (i.e. psychological empowerment) in reducing the negative impact of emotional exhaustion of frontline employees on their engagement. It also examines the moderating effects of ethical climate and transformational leadership in mitigating the negative influence of emotional exhaustion on engagement among frontline service employees (FLEs).Design/methodology/approachData were collected from 671 frontline employees from financial services sector. Confirmatory factor analysis (CFA) and hierarchical regression analysis (HRA) were used to test the hypothesized relationships.FindingsResults show that the impact of emotional exhaustion on employee engagement is greatly affected by psychological empowerment. Transformational leadership moderates the negative effects of emotional exhaustion on psychological empowerment, while ethical climate weakens the negative impact of emotional exhaustion on employee engagement.Practical implicationsService firms need to provide enough autonomy to emotionally exhausted frontline employees so that they feel valued. The emotionally exhausted employees can be engaged if they are empowered to discharge their job most effectively and a climate is ensured which can keep them motivated toward accomplishing their targets. A fair and just treatment shall boost their morale to perform better and to strengthen their staying intentions.Originality/valueThe novelty of our study lies in examining and fostering engagement among emotionally exhausted FLEs. It shows that job resources at the individual level (i.e. psychological empowerment), team level (i.e. transformational leadership) and organizational level (i.e. ethical climate) can help in encouraging work engagement among emotionally exhausted FLEs.

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Section: Methodsmentioning

confidence: 99%

Section: The Research Contextmentioning

confidence: 99%

Fostering engagement among emotionally exhausted frontline employees in financial services sector

Sahi

Singh

2022

JSTP

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“…From an economic perspective, this finding implies that these three banks maximize the cost benefits of the increase in size by reducing their risks through diversification into many production lines and spreading their costs to enjoy economies of scale and scope (Anagnostopoulos et al, 2022; Perera et al, 2007; Seelanatha, 2021). It simply suggests that the cost‐efficiency of the three banks is induced and caused by expanding their scales and scopes of operations (Rakshit & Bardhan, 2022a; Rakshit & Bardhan, 2022b; Wanke et al , 2022; Wu & Nahm, 2013). It is obvious that as banks grow in size, they gain cost‐efficiency (Anagnostopoulos et al, 2022; Halkos & Tzeremes, 2007).…”

Section: Presentation and Discussion Of Findingsmentioning

confidence: 99%

“…Two, listed banks are always in competition with one another (Rakshit & Bardhan, 2022a). These banks engage in similar products that are highly differentiated with a lot of glamourous packaging.…”

Section: Introductionmentioning

confidence: 99%

Do business strategies vary across firms in the banking industry? New perspectives from the bank size–profitability nexus

Olaniyi

Al‐Faryan

2022

Manage Decis Econ

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This study examines the roles of interdependence and policy variations across firms in the causality between bank size and profitability in Nigeria, using secondgeneration estimators and the Dumitrescu-Hurlin panel Granger non-causality test.The findings support different business strategies and policy variances across banks.Causality is found non-existent in the cases of 11 banks. A unidirectional causality from size to profitability is established in two banks while evidence of a unidirectional causality is established from profitability to bank size in the other two banks. This study concludes that cross-sectional dependence and policy variations across firms matter in the bank size-profitability nexus.

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“…These reform initiatives primarily aimed to ensure more competitiveness, enhance stability, maintain efficiency, and increase profitability to cater to the needs of greater economic growth. Many empirical studies have attempted to investigate whether these reforms initiatives have changed the degree of bank competition, efficiency, stability, and productivity of the Indian banking industry (Das & Kumbhakar, 2016;Rakshit & Bardhan, 2019, 2022. The reform initiatives have resulted in a changing competitive environment, in a phased manner, where the banks of different ownership groups engaged in fierce bank competition (Das & Ghosh, 2009).…”

Section: Introductionmentioning

confidence: 99%

Does Bank Competition Necessarily Contribute to Higher Profits? The Case of Indian Banking

Rakshit

2022

Asian Economics Letters

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This paper empirically examines an important research question of whether changes in bank competition have influenced the profitability pattern of Indian banking. Using the two-step system generalized method of moments, we examine the implications of bank deregulation measures on bank profitability for a set of 70 commercial banks in India over the period 1997 to 2017. The findings show that a higher degree of bank competition that has led to the contraction of the interest rates margin has negatively affected bank profitability. The findings also suggest important policy implications for the Indian banking industry.

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An empirical investigation of the effects of competition, efficiency and risk-taking on profitability: An application in Indian banking

Cited by 32 publications

References 64 publications

Fostering engagement among emotionally exhausted frontline employees in financial services sector

Fostering engagement among emotionally exhausted frontline employees in financial services sector

Do business strategies vary across firms in the banking industry? New perspectives from the bank size–profitability nexus

Does Bank Competition Necessarily Contribute to Higher Profits? The Case of Indian Banking

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