An empirical test of association between production and financial performance: the case of the commercial banking industry

Elyasiani, Elyas; Mehdian, Seyed; Rezvanian, Rasoul

doi:10.1080/758522125

Cited by 44 publications

(36 citation statements)

References 7 publications

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“…For banking firms,Elyasiani et al (1994),Berger and Mester (1997) andIsik and Hassan (2003c) also show that information contained in efficiency measures closely corresponds to that contained in standard financial ratios.…”

mentioning

confidence: 76%

Structural changes, market growth and productivity gains of the US real estate investment trusts in the 1990s

Topuz

Isik

2008

J Econ Finance

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confidence: 76%

Structural changes, market growth and productivity gains of the US real estate investment trusts in the 1990s

Topuz

Isik

2008

J Econ Finance

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“…Moreover, all balance sheet and income statement variables were found to be significant in explaining risk. Elyasiani, Mehdian and Rezvanian (1994) investigated the relationship between bank efficiency indexes and three categories of financial ratios; asset management, expense and profitability, and risk management ratios. The findings show that efficiency measures are indeed significantly associated with some financial ratios in each of the three categories and that this association is time-sensitive.…”

Section: Financial Institutionsmentioning

confidence: 99%

The Association Between Market and Exchange Rate Risks and Accounting Variables: A GARCH Model of the Japanese Banking Institutions

Elyasiani

Mansur

2005

Rev Quant Finan Acc

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This study has two purposes. First, it estimates the market, interest rate, and exchange rate sensitivities (betas) of the Japanese banking institutions. Second, it investigates the relationship between the market-based measures of risk and accounting-based financial ratios. We extend the literature in three important ways. First, we employ a multi-factor GARCH model to estimate the betas. This framework incorporates non-linearities in the bank stock return modeling and allows for time-varying risk premia. Second, we investigate the determinants of market and exchange rate risk in terms of bank financial ratios. To this end, we regress the beta measures derived from the GARCH model against the corporate decision variables to determine the direction and the magnitude of the impact of the latter on the market and exchange rate risk exposures. Third, by using data on the Japanese banking institutions, we provide a comparison of the bank interest rate and exchange rate sensitivities and the strength of the links between the risk measure and the corporate decision variables between the U.S. and the Japanese banking institutions. This comparison sheds light on the robustness of the results concerning interest rate and exchange rate risk, and their determinants, across the two countries. Several interesting results are obtained. First, empirical results indicate that interest rate is only occasionally significant while market and exchange rate variables are significant for all the banks in the sample. Second, market and exchange rate risk measures do impound information in the financial ratios with the explanatory power of the market beta model being higher than that of the exchange rate beta model. Third, the association of the market-based risk measures and the financial ratios is weaker for the Japanese banks than those found for their U.S. counterparts in the existing literature. Copyright Springer Science + Business Media, Inc. 2005bank, Japanese, risk, accounting ratios,

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“…The inputs and input prices used in the calculation of the efficiency measures are presented in Grabowski et al (1993), Elyasiani et al (1994), Drake and Weyman-Jones (1996) and Worthington (1998a;1998b]. Finally, the price of loanable funds (INT) is the sum of interest expenses divided by total loanable funds and recognises the direct costs associated with deposits as a source of funds.…”

Section: Specification Of Variablesmentioning

confidence: 99%

Cost efficiency in Australian non‐bank financial institutions: A non‐parametric approach

Worthington

2000

Accounting & Finance

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A two-stage procedure is employed to evaluate non-bank financial institution cost efficiency. In the first stage, data envelopment analysis is used to calculate technical, allocative and cost efficiency indices using a sample of two hundred Australian credit unions. The results indicate that a typical credit union's costs in 1997 were thirty percent above what could be considered efficient on the basis of observed best practice. The major source of overall cost inefficiency would appear to be allocative inefficiency, rather than technical inefficiency. The second stage uses limited dependent variable regression techniques to relate credit union efficiency scores to financial statement information. The results indicate that commercial lending activities, expenditures on information technology and marketing and promotion, the proportion of non-interest income, and association membership are a significant influence on the level of cost efficiency. The results are found to be invariant to alternative model specifications where input prices are first assumed to be different for each credit union and then assumed to be identical across the sample.

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An empirical test of association between production and financial performance: the case of the commercial banking industry

Cited by 44 publications

References 7 publications

Structural changes, market growth and productivity gains of the US real estate investment trusts in the 1990s

Structural changes, market growth and productivity gains of the US real estate investment trusts in the 1990s

The Association Between Market and Exchange Rate Risks and Accounting Variables: A GARCH Model of the Japanese Banking Institutions

Cost efficiency in Australian non‐bank financial institutions: A non‐parametric approach

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