Bank efficiency and foreign ownership: Do good institutions matter?

Lensink, Robert; Meesters, Aljar; Naaborg, Ilko

doi:10.1016/j.jbankfin.2007.06.001

Cited by 338 publications

(291 citation statements)

References 44 publications

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“…It suggests that banks in countries with a high ratio of CGDP exhibit a level of higher profit than banks in countries with low incomes. These results follow those of Carvallo and Kasman (2005).However, Lensink (2008) found a negative relationship between CGDP and TC, indicating that the increase in GDP reduced costs.…”

Section: 21-the Estimation Of the Results Of Cost And Profit Frontiersupporting

confidence: 90%

“…This can be explained by the fact that a high output level generates a high total cost and an increase in profit. Similar results, especially for the cost function are reported by several recent studies (Lensink et al 2008;Staikouras et al, 2008). The coefficient α 1 of the price of the funds of the cost function is significant which cannot explain that high input prices lead to higher costs.…”

Section: 21-the Estimation Of the Results Of Cost And Profit Frontiersupporting

confidence: 87%

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The Determinants of Cost/Profit Efficiency of Islamic Banks Before, During and After the Subprime Crisis Using SFA Approach

Mghaieth

Khanchel

2015

ijafr

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In this paper we estimate the determinants of cost and profit efficiency of Islamic banks using the stochastic frontier approach SFA. We use 62 Islamic banks in sixteen countries of the MENA and South-East Asia regions during the period [2004][2005][2006][2007][2008][2009][2010]. We compare the efficiency between Islamic banks during the subprime crisis phases. Moreover, we examine the variables specific to the banks which can explain the sources of inefficiency and those let us decline the scores of cost and profit efficiency on a specific number of variables (total assets, capital adequacy, profitability, credit risk, operational costs). Results reveal that, Islamic banks in our study are more efficient in the generation of the profits rather than in the control of the costs. Thus, only the total assets and the operational costs represent the determinants of cost efficiency of the Islamic banks. Finally, for the profit efficiency our results indicate that the Islamic banks with high equities and high ratio of profitability are efficient in terms of profit.

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Section: 21-the Estimation Of the Results Of Cost And Profit Frontiersupporting

confidence: 90%

Section: 21-the Estimation Of the Results Of Cost And Profit Frontiersupporting

confidence: 87%

The Determinants of Cost/Profit Efficiency of Islamic Banks Before, During and After the Subprime Crisis Using SFA Approach

Mghaieth

Khanchel

2015

ijafr

View full text Add to dashboard Cite

show abstract

“…of GDP per capita could result in the decline of banking costs as banks in more prosperous countries could benefit from access to new technologies (Lensink et al, 2008). On the other hand, an increase of GDP per capita could increase banking costs due to higher operating expenses to supply a given level of services (Dietsch and Lozano-Vivas, 2000).…”

Section: Data and Variablesmentioning

confidence: 99%

What drives investment bank performance? The role of risk, liquidity and fees prior to and during the crisis

Mamatzakis

Bermpei

2014

International Review of Financial Analysis

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This paper examines factors that affect the performance of investment banks in the G7 and Switzerland. In particular, we focus on the role of risk, liquidity and investment banking fees. Panel analysis shows that those variables significantly impact upon performance as derived from stochastic frontier analysis (SFA). Given our sample also comprises the financial crisis, we further test for regimes switches using dynamic panel threshold analysis. Results show different underlying regimes, in particular over the financial crisis. In addition, a strong positive effect of Z-Score on performance for banks in the regime of low default risk is reported, whilst fee-income ratio has also a positive impact for banks with low level of fees. On the other hand, liquidity exerts a negative impact. Notably, there is a clear trend of mobility of banks across the two identified threshold regimes with regards to risk a year before the financial crisis. Our results provide evidence that recent regulation reforms regarding capital adequacy and liquidity requirements are on the right track and could enhance performance.

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“…Conversely, other studies such as Hasan and Marton (2003) …nd that foreign banks in transition economies are less e¢ cient than domestic banks. Lensink et al (2008) analyze the performance of over 2000 banks in 105 countries and conclude that foreign banks are less e¢ cient than domestic banks. They attribute the di¤erence between the e¢ ciency of domestic and foreign banks to banking system conditions and the economic climate in the relevant countries.…”

Section: Impact Of Loan Portfolio Quality and Risk On Ine¢ Ciencymentioning

confidence: 99%