The contribution of product mix versus efficiency and technical change in US banking

Asaftei, Gabriel

doi:10.1016/j.jbankfin.2007.09.026

Cited by 32 publications

(21 citation statements)

References 28 publications

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“…We find that diversifying in different lines of business is not always better than a strategic focus on one line. We recommend studying scope economies on an international level in order to find out when it would be best to employ a single product strategy as opposed to providing multiple products (see, e.g., Asaftei, 2008, with an analysis of US banking). Many small insurers exhibit increasing returns to scale, whereas most large insurers are operating under decreasing returns to scale, which indicates that merger activity might be efficiency enhancing for small insurers, but not for large insurers.…”

Section: Resultsmentioning

confidence: 99%

Efficiency in the international insurance industry: A cross-country comparison

Eling

Luhnen

2010

Journal of Banking & Finance

191

160

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Section: Resultsmentioning

confidence: 99%

Efficiency in the international insurance industry: A cross-country comparison

Eling

Luhnen

2010

Journal of Banking & Finance

191

160

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“…Technological biases are more likely to occur in the case of multiple inputs -multiple outputs production and their presence is well documented in the literature on the banking industry (see Altunbas et al, 1999 among others). This can have significant consequences in the context of a changing regulatory environment (Stevenson, 1980;Asaftei, 2008).…”

Section: Model Specificationmentioning

confidence: 99%

The impact of regulatory reforms on cost structure, ownership and competition in Indian banking

Zhao

Casu

Ferrari

2010

Journal of Banking & Finance

135

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This is the accepted version of the paper.This version of the publication may differ from the final published version. Permanent repository link AbstractThis paper evaluates the impact of financial sector reforms on the cost structure characteristics and on the ownership-cost efficiency relationship in Indian banking. It also examines the impact of reforms on the dynamics of competition in the lending market. We find evidence that deregulation improves banks performance and fosters competition in the lending market. Results suggest technological progress, once Indian commercial banks have adjusted to the new regulatory environment. This, however, does not translate in efficiency gains. There is also evidence of an ownership effect on the level and pattern of efficiency change. Finally, competition keeps building pace even in the re-regulation period and technological improvements are not hampered by the tightening of prudential norms.

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“…The DEA approach is a linear programming technique where the efficient frontier is formed as the piecewise linear combination that connects the set of bestpractice observations in the dataset under analysis, yielding a convex production possibility set; see Asaftei (2008) and Cummins and Xie (2008). Due to its non-parametric nature, however, the DEA approach does not provide as much insight into market structure and firm behavior as the parametric SFA approach does.…”

Section: Introductionmentioning

confidence: 99%

Efficiency, technical change, and returns to scale in large US banks: Panel data evidence from an output distance function satisfying theoretical regularity

Feng

Serletis

2010

Journal of Banking & Finance

157

100

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a b s t r a c tThis paper provides parametric estimates of technical change, efficiency change, economies of scale, and total factor productivity growth for large banks (those with assets in excess of $1 billion) in the United States, over the period from 2000 to 2005. This is done by estimating an output distance function subject to theoretical regularity within a Bayesian framework. We find that failure to incorporate theoretical regularity conditions results in mismeasured shadow revenue and/or cost shares, which in turn leads to perverse conclusions regarding productivity growth. Our results from the regularity-constrained model show that total factor productivity of the large US banks grew at an average rate of 1.98% over the sample period. However, our estimates also show a clear downward trend in the growth rate of total factor productivity and our decomposition of the primal Divisia total factor productivity growth index into its three components -technical change, efficiency change, and economies of scale -indicates that technical change is the driving force behind this decline.

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The contribution of product mix versus efficiency and technical change in US banking

Cited by 32 publications

References 28 publications

Efficiency in the international insurance industry: A cross-country comparison

Efficiency in the international insurance industry: A cross-country comparison

The impact of regulatory reforms on cost structure, ownership and competition in Indian banking

Efficiency, technical change, and returns to scale in large US banks: Panel data evidence from an output distance function satisfying theoretical regularity

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