The profit efficiency of small US commercial banks
نویسندگان
چکیده
This study investigates the profit efficiency (PROFEFF) of small banks (those under $500 million in total assets) for 1990–96. Assuming that small banks and large banks use the same production technology, we find, consistent with Berger and Mester [J. Bank. Finance 21 (1997) 875], that small banks are more profit efficient than large banks. Small banks in non-metropolitan statistical areas (non-MSA) areas are consistently more profit efficient than small banks in MSAs. Cross-sectional analysis of the correlates of the PROFEFF estimates suggests that structure–performance factors, relationship–development factors, and expense-preference behavior play an important role in explaining the PROFEFF of small US commercial banks. 2002 Published by Elsevier Science B.V. JEL classification: G2; D2; G21; G28; E58; E61; F33
منابع مشابه
The Assessment of Operational Efficiency of Commercial Banks in India Using Cost to Income Ratio Approach
During the last two decades, financial institutions worldwide have witnessed a lot of stress in managing their margins in wake of the new risks, challenges and increase in the competition posed to them by the factors of liberalization and deregulation. The key to create value and achieve competitive edge lies in the better operational efficiency and productivity of these institutions under such...
متن کاملE-Banking Impact on the Profit Margin of Banks in Iran
Development of e-banking has empirically modified the structure and characters of banks’ performance, efficiency, risk and challenges which have also been articulately recognized based on the international best practices. E-banking brazenly accelerates and restructures financial transactions via enhancing technology and expanding the banking services in comparison with conventional banking. Acc...
متن کاملFinancial Stability in Islamic Banking System the Capacity to React to Current World Wide Crisis
This paper investigates the financial stability, measured by z-score technique in Islamic banking system of 20 countries from 2000 to 2010. We compare the stability of Islamic banks to the commercial banks, before and after the financial crisis. The empirical results from panel estimation show that: a) the large Islamic banks are more stable than the large commercial banks and furthermo...
متن کاملThe Impact of Information Technology US Commercial Bank Lending: Implications for Small Businesses
Over the last three decades, advances in information technology have improved banks’ efficiency of credit scoring/rating. I infer that the technology of credit rating improves by 45% from 1990 to 2007. I evaluate the effects of this technological improvement on the US commercial banking market with a dynamic, quantitative model. In the model, banks have an economy of scale at utilizing new tech...
متن کاملChina and the World Economy Research Paper 2010 / 11 Banking Reform and Efficiency in China : 1995 - 2008
Employing the one-step stochastic frontier analysis (SFA) approach, this paper examines bank efficiency in China, paying special attention to the ownership, selection effect and dynamic effects of governance changes on bank performance. Bank efficiency has improved over the data period 1995-2008. The estimated average cost and profit efficiencies are 74% and 63% respectively. Joint Stock Commer...
متن کامل