Community bank structure an x-efficiency approach

McKee, Gregory J.; Kagan, Albert

doi:10.1007/s11156-017-0662-9

Cited by 12 publications

(6 citation statements)

References 65 publications

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“…A similar sample period has also been used in Fujii et al (2018), but the sample of banks has been decreased due to missing data in the dependent variable LLP. Finally, McKee & Kagan, (2018) also utilize a data set ending in 2014 in a study of US community banks. The sample is constructed based on the following rationale; firstly, we are interested in how banks based in member states behave in local markets with respect to LLPs and are therefore not individually influenced by cross-border management behavior from non-domestic bank holding companies located in another jurisdiction -which of course could be found under a consolidated sample 7 .…”

Section: The Datamentioning

confidence: 99%

European bank loan loss provisioning and technological innovative progress

Simper

Dadoukis

Bryce

2019

International Review of Financial Analysis

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This paper presents an analysis of Loan Loss Provisioning (LLP) behavior of European banks across 26-member states to determine how bad management and Technological Innovative Progress (TIP) has affected bank risk management. Technological improvements in banking have seen advances in both back and front office operations with respect to lending. This is created through increased disembodied technological change capturing improvements in both non-financial and risk management technologies. We find, using a new dynamic LLP model that European banks employed bad management practices in relation to their lending and monitoring practices, leading to higher losses on loans (through increased LLPs). However, the relationship between TIP and LLPs indicates that those banks which increased their technological efficiency with respect to costs had a greater ability to recognize bad loans, and were therefore able to subsequently increase LLPs. That is, improving technology mitigated the impact of bad management practices in European banks.

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Section: The Datamentioning

confidence: 99%

European bank loan loss provisioning and technological innovative progress

Simper

Dadoukis

Bryce

2019

International Review of Financial Analysis

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“…The OP method and its subsequently improved ACF method were first employed to study the manufacturing sector, so studies that have applied these methods to the service sector industries are few and new (Parrotta et al, 2014). Therefore, we employed the SFA method (McKee & Kagan, 2018), which is more commonly used in the study of banking industry efficiency, for robustness testing. The results are shown in Figure 6.…”

Section: Resultsmentioning

confidence: 99%

“…There are various ways to evaluate bank efficiency, including production theory, intermediary theory, asset theory (Collard-Wexler & De Loecker, 2016; Elyasiani & Mehdian, 1990; McKee & Kagan, 2018 ). As banks gradually evolve into more comprehensive financial service providers (Song et al, 2018), the impact of intelligent technology is widespread (Fumiko et al, 2020), and so, based on our research purpose, we have endeavored to measure efficiency in terms of the full menu of each institution’s financial services.…”

Section: Methodsmentioning

confidence: 99%

Intelligent Technology Solutions and Banking Efficiency: The Impacts of Institutional Innovation and Consumer Participation

et al. 2023

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Intelligent technology solutions have revolutionized banking and enhanced the overall efficiency of financial institutions worldwide. As banks endeavor to evolve into comprehensive financial service hubs, this study examines the impact of intelligent technology solutions on the efficiency of a sample of Chinese banks and analyzes efficiency trends over time based on two vectors affecting intelligent technology (enterprise-side innovation and consumer-side co-creation). The study builds upon the parameter non-frontier method (ACF) to measure efficiency and examines intelligent technology solutions and channel usage in China from 2007 to 2017. The results indicate that intelligent innovation and consumer co-creation within intelligent channels both have significant positive impacts on banking efficiency. Moreover, these impacts have gradually surpassed traditional banking innovations and consumer participation in traditional self-service channels. In some ways, consumer participation’s positive impact on banking efficiency is even greater than banks’ institutional innovation. Notably, the relative influence of intelligent innovation and consumer participation on bank efficiency has shifted, and customer participation now occupies a more important position. Based on these findings, banks would be well advised to develop intelligent technology solutions along two paths: enhancing institutional technology and supporting consumer participation.

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“…The second rationale refers to information asymmetries as bank lending is an information intensive process by which banks collect relevant information from both borrowers and local markets (Wu and Wang 2000;McKee and Kagan 2017). If the severity of the asymmetric information problem intensifies with distance, banks can strategically use their informational advantage to create a threat of adverse selection for their rivals, and thus soften competition.…”

Section: Theoretical Backgroundsmentioning

confidence: 99%

How local is local? Evidence from bank competition and corporate innovation in U.S.

Tian

Han

2018

Rev Quant Finan Acc

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This paper aims to fill in a research gap in the effects of bank competition on corporate innovation. In addition to the evidence on the favorable effects of bank competition on corporate innovation, this paper shows novel evidence on the substitution effects of bank competition in a wider region and neighbor-state to local bank competition in financing corporate innovation activities. In financing innovation, we show 'how local is local' depends on the operating scope and information transparency of firms. Local banks have an information advantage over distant banks in financing local businesses and informationally opaque corporate innovation activities. Therefore, improved competition in distant banking markets may have limited ability to substitute the favorable effects of local bank competition in facilitating corporate innovation activities.

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Community bank structure an x-efficiency approach

Cited by 12 publications

References 65 publications

European bank loan loss provisioning and technological innovative progress

European bank loan loss provisioning and technological innovative progress

Intelligent Technology Solutions and Banking Efficiency: The Impacts of Institutional Innovation and Consumer Participation

How local is local? Evidence from bank competition and corporate innovation in U.S.

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