The impact of macroeconomic and regulatory factors on bank efficiency: A non-parametric analysis of Hong Kong’s banking system

Drake, Leigh; Hall, Maximilian J.B.; Simper, Richard

doi:10.1016/j.jbankfin.2005.03.022

Cited by 309 publications

(213 citation statements)

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“…Latterly, both single country and cross country efficiencies studies have been conducted for European countries, (e.g. Lozano (1997) on Spanish saving banks; Resti (1997) (Drake et al, 2006), Greece (Pasiouras, 2008), Singapore (Sufian, 2007), Ukraine (Kyj and Isik, 2008) and studies focusing on countries in transition, like India (Ataullah andLe, 2006, Bhattacharyya et al 1997), and Malaysia (Sufian, 2009). …”

Section: Bank Efficiency Literature Review and Methodologymentioning

confidence: 99%

Efficiency convergence properties of Indonesian banks 1992–2007

Zhang

Matthews

2012

Applied Financial Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes.You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. licence. www.econstor.eu If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated Cardiff Economics Working Papers Tiantian Zhang and Kent Matthews Efficiency Convergence Properties of Indonesian Banks 1992-2007E2011/12 CARDIFF BUSINESS SCHOOL WORKING PAPER SERIESThis working paper is produced for discussion purpose only. These working papers are expected to be published in due course, in revised form, and should not be quoted or cited without the author's written permission. Using panel data estimation, the paper examines β-convergence and σ-convergence, to test the speed at which Indonesian banks are converging, towards the best practice and country average. We find evidence that in general the post-crisis structural reform process improved the average level of efficiency and improved the distribution of efficiency across banks significantly. The Asian financial crisis and the structural reform had the effect of slowing the adjustment speed of bank efficiency. Key wordsBanks, Efficiency, Indonesia, Convergence. JEL Codes: G21, G28 Corresponding AuthorMs Tiantian Zhang (PhD Candidate) Cardiff Business School Cardiff University Colum Drive Cardiff CF10 3EU, United Kingdom Zhangt2@cardiff.ac.uk 1 IntroductionStudies of bank efficiency in the far Eastern emerging economies have become a growth industry in recent years. The reasons for these are threefold. First, since capital and debt markets remain undeveloped and immature, the principal process of financial intermediation remains the banking system. The role of the banking system in propagating shocks to the rest of the economy is evident in the part it played in Indonesia during the Asian financial crisis 1 . Second, the banking sector of the developing economies face stronger competition even with tighter post crisis regulatory changes. This creates the imperative to evaluate the position of the domestic banks in term of their performance and efficiency. Thirdly, the pass-through of central bank policy will depend on the competitive structure and efficiency of the banking syst...

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Section: Bank Efficiency Literature Review and Methodologymentioning

confidence: 99%

Efficiency convergence properties of Indonesian banks 1992–2007

Zhang

Matthews

2012

Applied Financial Economics

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“…It should be noted that due to technological advances and the development of innovative financial products, the intermediating activity of banks has decreased over the last decades at an international level 11 and has been partially substituted by the activity of other financial institutions such as pension funds and insurance companies as well as by fund-raising through capital markets. 12 9 This treatment of bank fees and securities income is in accordance with the profit and loss account approach followed by Drake et al (2006) and Asimakopoulos et al (2008). See also Guarda and Rouabah (2007) and Fixler and Zieschang (1992).…”

Section: Financial Intermediation Servicesmentioning

confidence: 94%

Assessing output and productivity growth in the banking industry

Athanasoglou¹,

Georgiou²,

Staikouras

2009

The Quarterly Review of Economics and Finance

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This paper assesses the evolution of output and productivity in the Greek banking industry for the period 1990-2006. Three main categories of bank output were estimated based on modern theoretical approaches, while for the aggregation and estimation of output and inputs and the estimation of productivity (partial and total factor) we relied on the index number method (Tornqvist index). Additionally, we considered the effect of labor quality on banks' productivity and using a growth accounting framework we examined the contribution of total factor productivity (TFP) to bank output growth. The results show that bank output and labor productivity increased considerably during the period under examination, outpacing the respective GDP growth and labor productivity of the Greek economy. Capital productivity and TFP of the Greek banking industry have also improved remarkably mainly since 1999, as a result of the structural changes that took place within the industry, capital investments (mainly in IT equipment) as well as improvement in the quality of human capital.

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“…Note however that the efficiency scores obtained with a two-stage analysis would still be environmentally-biased, because the inputs and outputs used in the first stage are not adjusted for environment. In order to properly control for these environmental variables, one Drake et al 2006;Liu and Tone 2008;Avkiran 2009;Liu 2018).…”

Section: Landscape Of Research On Efficiency Assessment In Bankingmentioning

confidence: 99%

“…With respect to the type of assessment perspective, which drives the choices of inputs and outputs, we classify the literature into six categories; namely, the intermediation approach or perspective (e.g., Rangan et al 1988;Ferrier and Lovell 1990;Charnes et al 1990;Mehdian 1990, 1992;Aly et al 1990;Yue 1992;Grabowski et al 1993;Fukuyama 1993;Zaim 1995;Favero and Papi 1995;Miller and Noulas 1996;Taylor et al 1997;Chen 1998;Drake et al 2006;Liu 2018), the asset approach (e.g., Favero and Papi 1995), the production approach (e.g., Drake et al 2006;Liu and Tone 2008), the value added approach (e.g., Bhattacharyya et al 1997;Pastor et al 1997;Chu and Lim 1998;Pastor 2002;Das and Ghosh 2006), the profit-oriented approach (e.g., Berger and Mester 2003;Drake et al 2006;Liu and Tone 2008), and the user cost approach (e.g., Hancock 1985a, b;Fixler and Zieschang 1992).…”

Section: Landscape Of Research On Efficiency Assessment In Bankingmentioning

confidence: 99%

“…The first category consists of single country focused studies and covers US Banks (Rangan et al 1988;Ferrier and Lovell 1990;Mehdian 1990, 1992;Aly et al 1990;Yue 1992;Miller and Noulas 1996;Kwon and Lee 2015), UK Banks (Drake 2001;Webb 2003;Webb et al 2010;Tanna et al 2011), Italian Banks (Favero and Papi 1995), Turkish Banks (Zaim 1995;Kutlar et al 2017), Japanese Banks (Fukuyama 1993;Liu and Tone 2008), Taiwanese Banks (Chen 1998;Liu 2018), Hong Kong Banks (Drake et al 2006), Singaporean Banks (Chu and Lim 1998), Indian Banks (Bhattacharyya et al 1997), Mozambique Banks (Wanke et al 2016), and Korean Banks (Lee et al 2017). The second category consists of multi-country focused studies and covers banks in several countries such as US, Australian, New Zealand, Austrian, Spanish, German, UK, Italian, Belgian, French, Danish, Luxembourg, Dutch, and Portuguese Banks (e.g., Pastor et al 1997;Pastor 2002;Lozano-Vivas et al 2002;Casu and Molyneux 2003;Pasiouras 2008;Avkiran 2009).…”

Section: Landscape Of Research On Efficiency Assessment In Bankingmentioning

confidence: 99%

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Assessing efficiency profiles of UK commercial banks: a DEA analysis with regression-based feedback

Ouenniche

Carrales

2018

Ann Oper Res

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Data envelopment analysis (DEA) has witnessed increasing popularity in banking studies since 1985. In this paper, we propose a new DEA-based analysis framework with a regression-based feedback mechanism, where regression analysis provides DEA with feedback that informs about the relevance of the inputs and the outputs chosen by the analyst. Unlike previous studies, the DEA models used within the proposed framework could use both inputs and outputs, only inputs, or only outputs. So far, the UK banking sector remains relatively under researched despite its crucial importance to the UK economy. We use the proposed framework to address several research questions related to both the efficiency of the UK commercial banking sector and DEA analyses with and without regression-based feedback. Empirical results suggest that, on average, the commercial banks operating in the UK-whether domestic or foreign-are yet to achieve acceptable levels of overall technical efficiency, pure technical efficiency, and scale efficiency. On the other hand, DEA analyses with and without a linear regression-based feedback mechanism seem to provide consistent findings; however, in general DEA analyses without feedback tend to over-or under-estimate efficiency scores depending on the orientation of the analyses. Furthermore, in general, a linear regression-based feedback mechanism proves effective at improving discrimination in DEA analyses unless the initial choice of inputs and outputs is well informed.Keywords Data envelopment analysis · Efficiency · UK commercial banks · DEA models without explicit inputs · DEA models without explicit outputs

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The impact of macroeconomic and regulatory factors on bank efficiency: A non-parametric analysis of Hong Kong’s banking system

Cited by 309 publications

References 39 publications

Efficiency convergence properties of Indonesian banks 1992–2007

Efficiency convergence properties of Indonesian banks 1992–2007

Assessing output and productivity growth in the banking industry

Assessing efficiency profiles of UK commercial banks: a DEA analysis with regression-based feedback

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