Nerlovian revenue inefficiency in a bank production context: Evidence from Shinkin banks

Fukuyama, Hirofumi; Matoušek, Roman

doi:10.1016/j.ejor.2018.05.008

Cited by 33 publications

(10 citation statements)

References 63 publications

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“…Fukuyama and Matousek [37] introduced a two-stage bank revenue function including NPLs to study Japanese banks. Fukuyama and Matousek [38] deviated from the previous papers which use a weakly efficient output frontier and computed a strongly efficient one.…”

Section: Selective Literature Review Of Dea Methods Dealing With Bankmentioning

confidence: 69%

“…1 also visualizes a two-stage network bank production process, where the first and second stages correspond to the fundraising and the revenue-generating activity, respectively. This production process differs from those used in Fukuyama and Weber [42,44,45] and Fukuyama and Matousek [37,38] since it models differently banks' production process using the quality of labor (human capital factor) that is involved in banks' revenue generation process. As a result the quality profile variables (labor's educational quality in our bank production framework) go into Stage 2 as non-discretionary inputs because the quality of labor cannot be changed within a year.…”

Section: Two-stage Network Dea Methodology In a Bank Context: Notatiomentioning

confidence: 99%

“…which is an adaptation of Färe et al [28] and Fukuyama and Matousek [38] . When the input prices as well as bad output prices are available, all the components in Eq.…”

Section: Two-stage Network Dea Methodology In a Bank Context: Notatiomentioning

confidence: 99%

“…By building upon the latest advances as has been introduced by Fukuyama and Matousek [38][39][40] , this paper contributes to the related literature in several ways. Firstly, based on the directional distance function (DDF) framework it measures banks' technical efficiency in relation to less efficient inputs proposing a network cost decomposition slack-based model.…”

Section: Introductionmentioning

confidence: 97%

“…However, Fukuyama and Matousek [37] applied a weakly efficient output frontier which overestimates the true technical efficiency and overlooks possible slacks. In order to surpass this drawback, Fukuyama and Matousek [38] applied a strongly efficient output frontier by modifying the model of Färe et al [27,28] into an additive alternative that fits into the Nerlovian revenue function and the directional distance function model.…”

Section: Introductionmentioning

confidence: 99%

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A Nerlovian cost inefficiency two-stage DEA model for modeling banks’ production process: Evidence from the Turkish banking system

Fukuyama

Matoušek

Tzeremes

2020

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By developing a two-stage model the paper examines the cost inefficiency levels of Turkish banks during the period from 2007 to 2016. Using the notion of Koopmans input efficiency we deconstruct the estimated Nerlovian cost inefficiency to the sum of slack-based allocative and technical inefficiency levels. Alongside the traditional inputs, intermediates and outputs used to model banks' performance measure we additionally use their labor education quality factor as a non-discretionary input. This allows us to model how human capital factors affect a bank's revenue generation stage. Our findings suggest that cost inefficiency levels are driven mainly by a bank's ability to control its allocative inefficiency levels. The empirical evidence also shows that foreign banks perform better, suggesting that bank ownership structures matter when measuring cost performance. Finally, it is evident that the Global Financial Crisis (GFC) had a negative effect on banks' ability to minimize their cost inefficiency levels. However, the post-crisis findings demonstrate that Turkish banks have started to recover from its negative effects, mainly by improving their allocative performance.

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Section: Selective Literature Review Of Dea Methods Dealing With Bankmentioning

confidence: 69%

Section: Two-stage Network Dea Methodology In a Bank Context: Notatiomentioning

confidence: 99%

“…which is an adaptation of Färe et al [28] and Fukuyama and Matousek [38] . When the input prices as well as bad output prices are available, all the components in Eq.…”

Section: Two-stage Network Dea Methodology In a Bank Context: Notatiomentioning

confidence: 99%

Section: Introductionmentioning

confidence: 97%

Section: Introductionmentioning

confidence: 99%

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A Nerlovian cost inefficiency two-stage DEA model for modeling banks’ production process: Evidence from the Turkish banking system

Fukuyama

Matoušek

Tzeremes

2020

Omega

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Basel accords and banking inefficiency: Evidence from the Italian local market

2022

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Using data for Italy from 1994 to 2015, we appraise the nexus between Basel II and III accords and both the cost and the profit inefficiency of profit‐oriented and mutual cooperative banks. Our analysis further deals with the effects of the regulation in different market structures. To assess the efficiency of the two types of banks under scrutiny, a stochastic frontier approach has been proposed. The evidence reported in this paper indicates that the regulatory framework of the Basel accords had heterogeneous effects on the efficiency of Italian banking institutions. Specifically, Basel II is associated with a contraction in the profit inefficiency and an increase in the cost inefficiency for mutual cooperative banks. On the other hand, Basel III worsened the profit inefficiency, though it is found to reduce the profit inefficiency of mutual cooperative banks, with no significant impact on cost inefficiency. Furthermore, once we control for the degree of market competition, the effects of the regulation are shown to be statistically insignificant. The advent of the 2008 recession and the application of the revenue inefficiency do not alter the main findings. There is also some evidence of spatial effects of the Basel II regulation at the LMA level.

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On modelling non‐performing loans in bank efficiency analysis

Karagiannis,

Kourtzidis

2024

Int. J Fin Econ

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This paper introduces a methodological framework for the examination of non‐performing loans (NPLs) as reverse outputs under the extended strong disposability assumption, which does not require NPLs to be jointly produced with net loans, as it is implied when they are modelled as undesirable outputs. A directional distance function model with reverse outputs is used and is compared with the models that treat NPLs as an undesirable output under the weak disposability and the constrained weak disposability assumptions with uniform and non‐uniform abatement factors. The model is applied at the case of European banks and for the sample to be representative the banks are chosen based on the European Banking Authority (EBA) stress test of 2021. The results indicate that the reverse output model have greater discriminatory power relative to all other models.

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Nerlovian revenue inefficiency in a bank production context: Evidence from Shinkin banks

Cited by 33 publications

References 63 publications

A Nerlovian cost inefficiency two-stage DEA model for modeling banks’ production process: Evidence from the Turkish banking system

A Nerlovian cost inefficiency two-stage DEA model for modeling banks’ production process: Evidence from the Turkish banking system

Basel accords and banking inefficiency: Evidence from the Italian local market

On modelling non‐performing loans in bank efficiency analysis

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