The efficiency of Japanese financial cooperatives: An application of parametric distance functions

Yamori, Nobuyoshi; Harimaya, Kozo; Tomimura, Kei

doi:10.1016/j.jeconbus.2017.09.001

Cited by 15 publications

(13 citation statements)

References 45 publications

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“…Although the one-step procedure proposed by Battese and Coelli (1995) was applied by using the same variables as inefficiency determinants, poor results were obtained[11]. Therefore, following Yamori et al (2017) that applied a two-step procedure, Tobit and OLS regression models are employed. As SFA efficiency scores are not censored, although their range is limited from 0 to 1, the parameter estimates are consistent with each other.…”

Section: Resultsmentioning

confidence: 99%

“…For instance, Glass et al (2014) examined the relative efficiency of Japanese cooperative banks between 1998 and 2009 using an enhanced hyperbolic distance function. Yamori et al (2017) investigated the efficiency of Japanese credit cooperatives between 2009 and 2014 using both output and input distance functions. Note that a distance function may be specified with either an input or an output orientation.…”

Section: Introductionmentioning

confidence: 99%

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Performance of agricultural cooperative banks in Japan

Harimaya

Kagitani

2019

AFR

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Purpose The purpose of this paper is to investigate the efficiency of the banking business of Japan’s agricultural cooperatives (JAs), which depend heavily on financial business with non-farmers, contradictory to cooperative principles. Design/methodology/approach The authors construct a panel data set over 2005–2016 from the financial statements of JAs’ prefectural-level federations and use the input distance stochastic frontier model with a time-variant inefficiency effect for analysis. Both the flow and stock measures of the banking output are used in identical models and the efficiency results are compared. The authors also investigate the determinants of efficiency by using the Tobit and ordinary least squares regression models. Findings There is strong evidence of significant prefectural differences in efficiency values. The ratio of lending to non-members to total loans is positively related to efficiency. In contrast, the higher reliance on a central organization and credit business leads to lower efficiency. Research limitations/implications Apart from banking, JAs provide mutual insurance business services. As the authors investigate only the efficiency of JAs’ banking business in this study, it would be necessary to investigate the efficiency of their insurance business as well when evaluating JAs’ overall financial business. Originality/value There are few studies that investigate the efficiency of JAs’ banking business and its determinants, although significant attention has been paid to their excessive dependence on the financial business.

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Section: Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Performance of agricultural cooperative banks in Japan

Harimaya

Kagitani

2019

AFR

Self Cite

View full text Add to dashboard Cite

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“…We do not give any specific treatment to credit unions that may have incorporations, that have discontinued their activity or that have changed their profile to free admission association process during the period under analysis, which is pointed out as a limiting of this research. Previous studies that examined the effects of mergers and incorporations of international credit unions on their efficiency show that the effects were mixed, with improvement and degeneration (Yamori, Harimaya, & Tomimura, 2017).…”

Section: Methodsmentioning

confidence: 99%

Efficiency of credit unions in Brazil: an analysis of the evolution in financial intermediation and banking service

Barros

Moraes

Salgado

et al. 2020

RAUSP

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Purpose The purpose of this paper is to evaluate the efficiency in financial intermediation and the cost efficiency in banking service of credit unions in Brazil, based on essentially accounting variables, and to analyze the temporal evolution of the efficiency of these cooperatives. Design/methodology/approach With a sample of 315 cooperatives over the period from 2007 to 2014, this research uses a two-stage process: application of regression models with panel data to verify which variables are related to the defined outputs, with the reduction of 31 variables to 8 variables in both models; and application of the data envelopment analysis method to obtain an analysis of credit unions’ efficiency. Findings The results demonstrate a high level of efficiency in financial intermediation, with low variation over time, associated with a low efficiency in the banking service, in which few cooperatives have remained efficient over time. In addition, the cooperatives with highest efficiency in financial intermediation were also the most efficient in providing services. Research limitations/implications This research has some limitations about the capacity of the proxies used to capture the real effect of the variables and assumptions of economic relations resulting in restrictions to generalize the results. Practical implications Cooperatives are usually analyzed under just one dimension. By separating the analysis into financial intermediation and banking services, cooperatives that are more efficient in each dimension can be identified, in addition to analyzing the evolution over time. The authors found that efficiency tends to be lower in banking services, and few cooperatives remain at the highest level of efficiency over time in both models. Social implications Credit unions provide an important service in the banking and credit market. Therefore, understanding its operation and the characteristics that influence its efficiency allows a better management of the cooperatives themselves and a greater understanding of this important segment of the financial market.

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“…Moreover, a few studies (e.g., [67,82,156]) employed export-oriented ratios, such as the export intensity ratio (i.e., export to total sales) or the degree of internationalization ratio (i.e., foreign sales to total sales). Finally, many studies devoted to retail banking (e.g., [157][158][159][160]) made use of banking-specific ratios like the loan ratio, often on top of examining the traditional ones.…”

Section: Phasementioning

confidence: 99%

Harnessing a ‘Currency Matrix’ for Performance Measurement in Cooperatives: A Multi-Phased Study

et al. 2018

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The cooperative organizational form is by nature a sustainable one, which has proved to be resilient in the face of crises and a solid lever in addressing present-day societal challenges. Still, little is known about its socio-economic impact. Also, despite the plethora of studies on cooperative performance, research remains inconclusive about how to best measure it. In fact, scholarly work has largely favored the use of appraisal tools reflecting those of investor-owned firms (IOFs), having undermined the dual idiosyncratic nature of the cooperative organizational form, which is manifest in the business and social-membership objectives. The goal of this article is to fill these gaps by delivering a comprehensive dashboard for cooperative performance assessment that harmonizes business–social aspects and catalogs the basic components for future attempts. To reach this goal, we used an extensive review of empirical research in cooperative performance (phase 1) and a Delphi study with 14 experts (phase 2). In addition, we reviewed comparable research efforts for a business form (social enterprises) that combines business with social goals and faces similar challenges (phase 3). This inquiry was particularly insightful for the social perspective and the overlooked role of cooperatives as a socially-embedded organizational form that hardly documents its societal impact and outreach.

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The efficiency of Japanese financial cooperatives: An application of parametric distance functions

Cited by 15 publications

References 45 publications

Performance of agricultural cooperative banks in Japan

Performance of agricultural cooperative banks in Japan

Efficiency of credit unions in Brazil: an analysis of the evolution in financial intermediation and banking service

Harnessing a ‘Currency Matrix’ for Performance Measurement in Cooperatives: A Multi-Phased Study

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