Are cooperatives the weakest link in European banking? A non-parametric metafrontier approach

Κοντόλαιμου, Αλεξάνδρα; Tsekouras, Kostas

doi:10.1016/j.jbankfin.2010.01.003

Cited by 91 publications

(58 citation statements)

References 49 publications

(54 reference statements)

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“…A number of papers have analysed small credit institutions focusing on performance (Goddard et al, 2008a;Kontolaimou and Tsekouras, 2010), diversification (Goddard et al, 2008b;Lepetit et al, 2008;Mercieca et al, 2007, Mckillop andWilson, 2011), risk of failure (Fiordelisi and Mare, 2013) and ownership structure (Gorton and Schmid, 1999 (Hesse and Cihák, 2007;Ayadi et al, 2010) providing empirical evidence that cooperative banks are more stable than commercial banks as they have a great deal of soft information (which is hard to collect) on the creditworthiness of members/customers, and therefore less likely to make lending mistakes. Furthermore, size appears to be positively related to systemic risk (Vallascas and Keasey, 2012;De Jonghe, 2010) and the majority of cooperative banks are small rural credit institutions.…”

Section: Introductionmentioning

confidence: 99%

“…First, cooperative banks are different from commercial banks and their stability is influenced by different factors 4 . Recent studies have focused on productive performance related to the technological development (Kontolaimou and Tsekouras, 2010), the performance and risk depending on the ownership structure (Iannotta et al, 2007) and cost efficiency and financial structure . Second, competition is likely to be one of the key factors influencing banking stability, but its influence is probably different for commercial and cooperative banks.…”

Section: Introductionmentioning

confidence: 99%

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Competition and financial stability in European cooperative banks

Fiordelisi

Mare²

2014

Journal of International Money and Finance

247

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Cooperative banks are a driving force for socially committed business at a local level accounting for around one fifth of the European Union (EU) bank deposits and loans. Despite their importance, little is known about the relationship between bank stability and competition for these small credit institutions. Does competition affect the stability of cooperative banks? Does banks' financial stability increase/decrease in case of higher competition? We assess the dynamic relationship between competition and bank soundness (both in the short and long run) in the European cooperative banking between 1998 and 2009. We obtain three main results. First, we support the competition-stability view proposed by Boyd and De Nicolò (2005). Bank market power negatively Granger-cause banks' soundness meaning that there is a positive relationship between competition and stability. Second, we provide evidence of the negative impact of the 2007-2009 financial crisis on the individual risk exposure of cooperative banks although it does not change the relationship between competition and stability. Third, we show that herding behaviour affects positively bank soundness. Our findings have important policy implications for designing and implementing regulations that enhance the overall stability of the financial system. JEL-Classification: C23, G21

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Competition and financial stability in European cooperative banks

Fiordelisi

Mare²

2014

Journal of International Money and Finance

247

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“…however the importance of properly accounting for heterogeneity has been highlighted in a handful of recent studies (Bos and Schmiedel, 2007;Kontolaimou and Tsekouras, 2010).…”

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confidence: 99%

Regulatory Reform and Productivity Change in Indian Banking

Casu

Ferrari

Zhao

2013

Review of Economics and Statistics

110

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“…It is very interesting to notice that the meta-frontier approach has not yet been applied in the automobile-industry related research though it has been employed in many fields in the past decade such as Bos & Schmiedel (2007), Chen & Song (2008), Matawie & Assaf (2008) Kontolaimou & Tsekouras (2010), Lin (2011), Mariano et al (2011), and Chen & Yang (2011. This highlights the significance of applying the meta-frontier approach to scrutinize the efficiency of global automakers from an unexplored perspective.…”

Section: Literature Reviewmentioning

confidence: 99%

Which One is More Efficient? German or Japanese Automobile Industry: A Meta-frontier with Technology Gap Comparison

Liu¹,

Chen²

2016

IBR

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The goal of this paper is to compare the cost efficiency of the automobile industry in Germany and Japan during the period of 1980-2014 by applying the Meta-Frontier Cost Function. Despite the constant competition and the global automobile industry crisis during 2008-2010, only a few existing studies compare the efficiency of the industry cross countries. However, these all fail to address various types of technology adopted and the environment faced by automakers across countries. The meta-frontier model became a recognized and useful tool to evaluate technical efficiency of firms applying dissimilar technologies. Overall, the results signify that the cost efficiency of the German automobile industry by average is better than that of the Japanese one and the German one uses more superior production technique though it was lower the Japanese one in the 1980s. The difference reversed in the 1990s and has been enlarging since the 1990s to the end of the observation period.

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Are cooperatives the weakest link in European banking? A non-parametric metafrontier approach

Cited by 91 publications

References 49 publications

Competition and financial stability in European cooperative banks

Competition and financial stability in European cooperative banks

Regulatory Reform and Productivity Change in Indian Banking

Which One is More Efficient? German or Japanese Automobile Industry: A Meta-frontier with Technology Gap Comparison

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