banking sector performance profitability and efficiency a citation based systematic literature review this study presents a citation based systematic literature review on banking sector performance particularly in terms of profitability productivity and efficiency specifically the study aims to identify the leading sources of knowledge in terms of the most influential journals authors and papers the paper presents a content analysis of the 100 most cited papers in total 1996 peer review papers were found relevant in the scopus database by using a comprehensive list of keywords the results show that the journal of banking finance appears to be the leading journal in terms of publication count and citations based on total citations allen berger is the most prolific author the most cited paper is problem loans and cost efficiency in commercial banks by allan berger and robert deyoung the content analysis of the top 100 papers identifies five essential themes determinants of efficiency methodology ownership financial crises and scale economies in terms of estimation approaches 74 of papers employed frontier analysis which includes 34 parametric and 40 nonparametric methods and remaining 26 have used financial ratio analysis additionally stochastic frontier and data envelopment analysis are widely used in parametric and nonparametric methods respectively an intermediate approach is extensively adopted for the specification of inputs and outputs

the evolution of institutions in india and its relationship with economic growth this paper examines the evolution in a few public institutions over time in india it presents three types of evidence on institutional outcomes such as losses in power generation backlogs in disposal of court cases on perceptions based measures of governance some going back to the 1960s and finally on customs administration and whether it has been more effective at detecting evasion over time all the evidence suggests that institutional quality has not improved over time it then addresses the two way relationship between growth and institutions in terms of two apparent paradoxes the first is why growth has turned around so dramatically in india despite the relatively limited nature of reforms especially compared with other countries the second paradox is why despite nearly 30 years of rapid growth institutions have not improved the paper offers some explanations that might help explain these paradoxes

financial deregulation and productivity growth in banking sector empirical evidence from bangladesh this article examines the effects of regulatory reform on productivity growth in the bangladesh banking industry we use a unique balanced panel dataset comprising bank level annual data from the e

india trade policy review the review of india s trade policy by the wto the third of its kind is in three parts the report by the wto secretariat a statement by the government of india and minutes of the discussion of the report by the trade policy review board the review provides detailed information not only on india s trade and foreign investment policies but also an analytical review of india s export and economic performance the review notes that india has made considerable progress with the liberalisation of its trade and investment regime but it has a long way to go if it were to achieve a growth rate of eight to nine per cent the stated objective of the policy makers this paper drawing upon the material in the report analyses india s growth prospects and endorses the broad conclusions of the report

international search behavior of business group affiliated firms scope of institutional changes and intragroup heterogeneity this paper investigates whether and when affiliation to business groups enables or constrains firms international search behavior during institutional transitions we theorize that given the unique structure and complex form of business group organizations the search behavior of affiliated firms is influenced by the degree of misalignment in outlook at the group and affiliate levels of management we identify the scope of institutional changes business group attributes and affiliate characteristics as sources of such misalignment the results from panel data on 298 firms from the indian pharmaceutical industry for the 1992 2007 period show that the constraining effects of business group affiliation are observed only when institutional changes are specific to the affiliates industry and not when broad institutional changes affect the business group as a whole moreover we observe heterogeneity in the search behavior of group affiliated firms first the degree of misalignment is greater in the case of affiliates belonging to older business groups and those that are more distant in terms of age and industry since the group s founding second by contrast and suggesting an alignment in outlook we find that affiliated firms that occupy a prominent position within a group or industry are able to bargain for and receive attention and support from the business group to undertake international search our findings have implications for research on the role of business groups in a changing institutional context and for the strategic adaptation of firms embedded in complex organizational and institutional settings

co2 emissions from household consumption in india between 1993 94 and 2006 07 a decomposition analysis abstract co 2 emission from anthropogenic activities is one of the major causes of global warming india being an agriculture dependent country global warming would mean monsoon instability and consequent food scarcity natural disasters and economic concerns however with proper policy interventions co 2 emissions can be controlled input output analysis has been used to estimate direct and indirect co 2 emissions by households for 1993 94 1998 99 2003 04 and 2006 07 complete decomposition analysis of the changes in co 2 emissions between 1993 94 and 2006 07 has been done to identify the causes into pollution energy intensity structure activity and population effects according to broad household consumption categories results indicate that activity structure and population effects are the main causes of increase in co 2 emission from household fuel consumption to identify the causes at the sectoral level a second decomposition has been done for changes between 2003 04 and 2006 07 to identify the causes in the next stage finally alternative energy policy options have been examined for each consumption category to reduce emissions combined strategies of technology upgradation fuel switching and market management in order to reduce co 2 emissions for sectors like batteries other non electrical machinery construction and electronic equipments including television for which all the effects are positive need to be adopted

scale economies in banking a restructuring and reassessment the issue of scale economies in banking has a rich history most earlier studies report modest operating cost scale economies for small institutions those with less than about 50 million of deposits in 1968 dollars but are unclear where these economies might end if at all unfortunately these studies are limited in four important respects first those that were well specified did not measure the total cost of banking operations but concentrated on estimating scale economies for individual banking functions e g demand deposits separately from commercial loans second an average cost curve that could take a u shape over the full range of banks was not fitted either because larger banks were not included or because of the functional form used cobb douglas consequently the optimum or minimum cost size of a bank or office could not be determined third the variables measuring the costs of branching were misspecified fourth the branch

productivity growth in large us commercial banks the initial post deregulation experience abstract we explore productivity growth for a group of 201 large us commercial banks over the initial post deregulation period from 1984 to 1990 using data envelopment analysis dea we measure productivity growth using malmquist productivity indexes and isolate the contributions of technical change technical efficiency change and scale change to productivity growth we find overall productivity growth at the rate of about 4 5 per year on average but productivity declined by 7 61 between 1984 and 1985 and by 0 33 between 1988 and 1989 our second stage panel regressions reveal that larger asset size and specialization of product mix associate with higher productivity growth while higher equity to assets associates with lower productivity growth

output and productivity in banking concepts in banking output and the empirical literature on bank productivity which employs output concepts are critically surveyed for output the national accounts production and intermediation approaches are compared as regards productivity both partial and total factor productivity measures and the dea and parametric approaches to the latter are assessed among the most striking results is the prevalence of technical inefficiency in banking but it is also suggested that measurement techniques have often outpaced the theory of what is to be measured notably in fields such as joint production risk and competition alternative approaches to address these issues are suggested

are bureaucrats efficient an application to the provision of afdc the question on how bureaucrats behave in the provision of a public service has been the subject of a considerable amount of research most of which has been largely theoretical and inconclusive especially on the issue of efficiency this paper builds a bureaucratic theoretical model and provides empirical evidence by examining the workings of a government bureau supplying a public service namely aid to families with dependent children afdc at the state level it builds and estimates a generalized short run cost function that allows for systematic relative price inefficiency and does not require cost minimization subject to market prices as a maintained hypothesis the model tests cost minimization as a testable special case the estimating procedure allows us to test for a number of other features of the technology that are of interest such as productivity growth marginal costs returns to scale technical change and factor demands

estimating most productive scale size using data envelopment analysis abstract the relation between the most productive scale size mpss for paparticular input and output mixes and returns to scale for multiple inputs multiple outputs situations is explicitly developed this relation is then employed to extend the applications of data envelopment analysis dea introduced by charnes cooper and rhodes ccr to the estimation of most productive scale sizes for convex production possibility sets it is then shown that in addition to productive inefficiencies at the actual scale size the ccr efficiency measure also reflects any inefficiencies due to divergence from the most productive scale size two illustrations of the practical applications of these results to the estimation of most productive scale sizes and returns to scale for hospitals and stem electric generation plants are also provided emphasize the advantage of this method in examining specific segments of the efficient production surface

economic reforms in india since 1991 has gradualism worked opinions on the causes of india s growth deceleration vary world economic growth was slower in the second half of the 1990s and that would have had some dampening effect but india s dependence on the world economy is not large enough for this to account for the slowdown critics of liberalization have blamed the slowdown on the effect of trade policy reforms on domestic industry however the opposite view is that the slowdown is due not to the effects of reforms but rather to the failure to implement the reforms effectively this in turn is often attributed to india s gradualist approach to reform which has meant a frustratingly slow pace of implementation however even a gradualist pace should be able to achieve significant policy changes over ten years this paper examines india s experience with gradualist reforms from this perspective

measuring the nominal value of financial services in the national income accounts measuring the nominal value of financial services in the national income accounts i introduction the treatment of financial services in national income accounting has been a sometimes controversial subject for over thirty years for economies which specializes in financial services such as switzerland and luxembourg the treatment of these services has always been critical to an accurate assessment of their domestic product and foreign trade status with the recent growth in the financial services sector in the united states this controversy and its resolution are again topical in the united states between 1977 and 1985 the commercial banking share of gnp increased by 34 7 percent while its share in national employment increased by 23 3 percent furthermore the internationalization of capital markets has significantly increased the importance of financial services in the u s trade accounts in this paper we examine both current and proposed treatments of financial services in the national income accounts specifically we briefly review the concepts and methods currently used by the united nations u n and the united states u s commerce department to determine the nominal value of financial services with particular emphasis on their treatment of uncharged for services many financial services are provided without an explicit charge these uncharged for financial services can be viewed as implicit payments to depositors for their funds or simply as payments in kind the issue in the national accounting literature is whether the net interest earned by financial firms should be treated as the value of these uncharged for services and whether it should be included in the nominal value of output in the national accounts 1 we then evaluate a variety of possible methods for inferring the nominal value of financial services from existing sources of information these methods are called imputation methods we base our evaluation of alternative imputation methods on their consistency with a microeconomic theory of financial firms grounded in a user cost of money concept developed by donovan 1978 and barnett 1980 and applied to financial firms by hancock 1985 we show that several of these imputation methods are inconsistent with or not closely related to this microeconomic foundation we then derive a general imputation formula within the financial firm framework and demonstrate how the two leading imputation methods those of the u s department of commerce and the u n statistical office are specializations of this formula our framework thus provides a heretofore absent economic rationalization for the imputation methods commonly used we then briefly introduce a conceptual framework for the construction of a financial firm output price index this index yields a measure of real output consistent with the accounting approaches we summarize our points in the concluding section ii current views of interest payments in national accounts the revenues of financial firms consist largely of net interest the difference between interest received primarily from loans and interest paid primarily on deposit accounts and explicit service charges service charges are typically only a minor part of the total revenue received by banks and fall short of covering the non interest cost of operations by implication financial firms provide services for which there is not an explicit charge and the cost of these services must be partly or wholly offset by net interest controversy however exists over how to value the implicit financial services provided because of long held differences about the way in which interest is viewed as a transfer payment between borrowers and lenders or as a payment for services rendered interest as a transfer payment in this view financial firms merely serve as conduits for the interest payment flows between borrowers and lenders depositors

financial intermediation and delegated monitoring this paper develops a theory of financial intermediation based on minimizing the cost of monitoring information which is useful for resolving incentive problems between borrowers and lenders it presents a characterization of the costs of providing incentives for delegated monitoring by a financial intermediary diversification within an intermediary serves to reduce these costs even in a risk neutral economy the paper presents some more general analysis of the effect of diversification on resolving incentive problems in the environment assumed in the model debt contracts with costly bankruptcy are shown to be optimal the analysis has implications for the portfolio structure and capital structure of intermediaries

the effects of shared atm networks on the efficiency of turkish banks this study investigates whether forming shared atm networks has yielded positive benefits for banks in turkey by increasing their productive efficiency using a data envelopment analysis dea approach pure technical and scale efficiency scores of turkish banks are estimated and analysed for the period 2000 2003 the results suggest that although it is possible to realize positive effects through atm sharing arrangements there are multiple factors that determine which banks realize such benefits the geographical distribution of shared atms between urban and rural markets and the level of competition between banks within urban areas are shown to be important determinants of differences in bank efficiency this discrepancy between the gains associated with atm sharing may have important implications concerning the adoption and sharing of new technology by banks in developing countries

data transformations in dea cone ratio envelopment approaches for monitoring bank performances abstract cone ratio dea data envelopment analysis models are suggested for monitoring and or early warning systems to be used by bank regulatory agencies illustrative examples are developed from data on 1984 and 1985 performances of the 16 largest banks in texas five large non texas banks are introduced as excellent performers to help evaluate these texas banks in terms of their risk coverage as well as efficiency cone ratio envelopment areused to tarnsform original data in order to reflect performances by the non texas banks with respect to risk coverage as well as efficiency formulas for transforming to and from the original data are supplied with accompanying explanations and interpretations which include comparisons with the risk adjusted capital and risk coverage allowances formulas that have been adopted recently by u s government and other regulators in banking and insurance in conformance with the basel agreement of 1988

evolution of bank efficiency in brazil a dea approach abstract this paper investigates cost technical and allocative efficiencies for brazilian banks in the recent period 2000 2007 we use data envelopment analysis dea to compute efficiency scores brazilian banks were found to have low levels of economic cost efficiency compared to banks in europe and in the us for the period with high macroeconomic volatility 2000 2002 the economic inefficiency in brazilian banks can be attributed mainly to technical inefficiency rather than allocative inefficiency state owned banks are significantly more cost efficient than foreign private domestic and private with foreign participation there is no evidence of differences in economic efficiency due to type of activity and bank size these results may provide some useful guidance for financial regulators and bank managers

technical scale and allocative efficiencies in u s banking an empirical investigation a nonparametric frontier approach is used to calculate the overall technical pure technical allocative and scale efficiencies for a sample of 322 independent banks the sample was drawn from the federal deposit insurance corporation tapes on the reports of condition and reports of income call reports for the year 1986 the results indicated a low level of overall efficiency the main source of inefficiency was technical in nature rather than allocative separate efficiency frontiers were constructed to test the effect of branching however the distributions of efficiency measures for branching and non branching banks were not found to be different

infrastructure provision and macroeconomic performance this paper studies the differences between private and government provision of infrastructure capital utilization decisions and their differential role in determining market prices for capital goods under the two regimes of infrastructure provision serve as a critical transmission mechanism for fiscal policy a subsidy to private providers of infrastructure is preferable to direct government provision irrespective of how the subsidy or expenditure is financed the case for private provision is much stronger in economies characterized by high levels of congestion the choice between private and government provision also has a crucial effect on the design of optimal fiscal policy 2011 elsevier b v all rights reserved

bank employment in the world s largest banks an update note in this paper we replicate two studies published in this journal twelve and thirteen years ago short 1971 and kaufman 1970 the results indicate that there may indeed have been substantial gains in labor productivity among the world s largest banks over the period 1967 79 moreover the gains were greater for the smaller banks in our sample than for the larger ones because banking has traditionally been regarded as a highly labor intensive industry the general assumption has been that productivity gains in banking would be hard to achieve and even harder to identify baumol and oates 1972 ascribed the source of rising costs or a cost disease in service industries to the lagging technical progress there vis a vis other industries in the economy several attempts have been made to investigate this thesis with respect to banking with mixed results kinsella 1973 found that the growth in labor productivity in banking in ireland during the 1960 71 period confirmed the baumol oates 1972 hypothesis how

evaluating the cost efficiency of the italian banking system what can be learned from the joint application of parametric and non parametric techniques abstract research on bank efficiency has developed in two separate streams econometric studies and data envelopment analysis a linear programming technique these two branches of literature have developed quickly but separately in this paper these two approaches have been tested on a common panel of 270 italian banks and this has suggested the following i econometric and linear programming results do not differ dramatically when based on the same data and conceptual framework ii when differences arise they can be explained by going back to the intrinsic features of the models moreover some findings on italian banks may be of interest also to the international reader i efficiency scores show a high variance ii the banking system is split in two between northern and southern banks iii there is a direct rather than inverse relationship between productive efficiency and asset quality iv the efficiency of italian banks did not increase over the period 1988 1992

production efficiency of british building societies the purpose of this paper is to examine the relative efficiency of british building societies and to find out whether efficiency factor is the driving force behind the merging of small building societies efficiency indices for societies are derived from a 1981 sample of cross section data the results indicate wide disparities in efficiency these differences are not related to the size of building societies but apparently to managers skill and motivation

strategic aspects of public finance in a world with high capital mobility abstract in a world with high capital mobility an increase in equity taxes is likely to induce a capital out flow it is commonly believed that in consequence there may be an under provision of public goods when governments have only equity taxes at their disposal this paper compares the provision of public goods under cooperative and non cooperative tax policies suprisingly the non cooperative regime may result in either an over or an under provision of public goods it is also shown that the gains from coordination increase as countries become atomistic

competition in fragmented markets new evidence from the german banking industry in the light of the subprime crisis abstract of all of the eu member states germany has the largest banking market however not all german banking institutions necessarily face fierce competition because the industry is highly fragmented strict separation of the three existing banking pillars may impede competition with negative effects on financial stability we assess the competitive stances of 1 888 universal banks from 2001 to 2009 by using the panzar rosse revenue test we find evidence that measuring competition at an average country level does not necessarily generate valid evaluations of fragmented markets in addition we find no clear indication that either the particular objectives of cooperative and savings banks or the legal protection of these institutions impedes competition or discriminates against private banks therefore as long as the relationship between competition and financial stability is dubious the overall effect and the social costs or benefits of political measures that influence the structure of the german banking market are at least questionable

efficiency in the commercial banking industry a production frontier approach 1990 efficiency in the commercial banking industry a production frontier approach applied economics vol 22 no 4 pp 539 551