How the environment determines banking efficiency: a comparison of banking firms in Taiwan, Hong Kong, and Mainland China

This paper investigates the conditional technical and managerial efficiency of European banks through the lending channel using a robust nonparametric frontier approach. We select the largest commercial banks in France, Germany, the United Kingdom, Italy, Spain, and Greece over the period 2005-2013 for our study. The estimates show significant technical inefficiency in the use of available resources for banks in our sample. The overall measure of managerial efficiency suggests sound managerial performance. However, at a detailed level, we find that, for each country examined, banks exhibit large proportions of poor managerial performance. This may explain why some banks could not resist the 2008 financial crisis. Regarding institutional factors, we find capital requirements and bank size are associated with bank efficiency in a nonlinear manner. These findings provide support for contextual factors in determining bank efficiency and rethinking financial reforms.

Section: Related Literaturementioning

confidence: 99%

Technical and managerial efficiency assessment of European banks using a conditional nonparametric approach

Minviel

Bouheni

2020

“…Shyu et al. () investigate banking efficiency in Taiwan, Hong Kong and Mainland China; they conclude that environmental conditions have significant impact on efficiency measurement. There is some literature working on Chinese banking productivity; Kumbhakar and Wang () analyse the impact of banking reform on banking productivity and find that the productivity increases during 1993–2002.…”

Section: Literature Reviewmentioning

confidence: 99%

A spatial production analysis of Chinese regional banks: case of urban commercial banks

Zhao

Kenjegalieva

Wood

et al. 2019

Urban commercial banks are regional banks which have gained tremendous importance in the last two decades in China. There is, however, a lack of research on regional banking, especially on the Chinese regional banking industry. Therefore, using an innovative spatial approach, this paper investigates the efficiency of 65 Chinese urban commercial banks across 26 regions during 2013-2017. A key finding for our sample is the significant spatial dependence of loans of Chinese urban commercial banks with their neighbouring regions' banks. Shortrun efficiency is increasing during the research period. For regions with less than three urban commercial banks, the average efficiencies are stable and relatively high. However, regions with more banks have both the highest and lowest efficient banks at the same time. These interesting results fit with the development process of Chinese urban commercial banking, in which the market restructuring has contributed to banks' efficiency.

“…DEA is a nonparametric method, which has been proved to be a powerful decision tool being widely used for evaluating the relative efficiency of decision‐making units (DMUs) in versatile applications (Saranga and Phani, ; Kounetas et al., ; de Figueiredo and Marca, ; Miranda et al., ; Chiu et al., ; Santín, ; Yadav et al., ; Shyu et al., ; Souza and Gomes, ; Gomes et al., ; Hoon et al., ; Moreno and Lozano, ; Tran and Villano, ). Building on the work of Farrell (), it was first generalized by Charnes et al.…”

Section: Data Envelopment Analysismentioning

confidence: 99%

A robust DEA‐centric location‐based decision support system for expanding Recreovía hubs in the city of Bogotá (Colombia)

Abolghasem

Estrada-Solano

Bedoya

et al. 2018

Multisectorial community programs to promote healthy living in public spaces are crucial for building a "culture of health" and could contribute to achieving the specific 2030 agendas of sustainable development goals, including reduction of inequalities; provision of inclusive, safe, resilient, and sustainable cities; and promotion of just, peaceful, and inclusive societies. In this context, the Recreovía program of Bogotá (Colombia) provides physical activity classes in parks mainly for vulnerable communities. We address the challenge of efficiently locating new Recreovía hubs through a novel robust data envelopment analysis (DEA) centric location-based decision support system (DSS) that helps the District Institute of Sports and Recreation of Bogotá (IDRD) to locate the best hubs to expand the Recreovía program throughout the city. The tool is applied to analyze different scenarios including one that was implemented in Bogotá and yielded an improvement of 28% in compound monthly growth rate of the average attendance to the hubs.