bank acquisitions and ownership structure theory and evidence abstract in this paper we both theoretically and empirically consider the joint nature of two ownermanager conflict resolution mechanisms insider shareholdings and shareholder concentration we find evidence of a significant entrenchment effect for high low firms moreover bidder returns are found to be positive for high high firms only we utilize a switching of regression regimes model to solve for critical values of and that subdivide the universe of acquiring firms into separate and distinct ownership structure regimes i e that define high vs low levels of or

petrol prices oil price rises and oil price falls some evidence for the uk since 1972 this paper examines the relationship between retail petrol prices excise duties and crude oil prices in the uk over the period 1973 1988 the existence of a stable relationship between the petrol price level of excise duty and spot oil price is confirmed through use of the cointegration approach although the speed of reaction of petrol prices to changes in the crude price depends on whether crude prices are rising or falling any asymmetry in the pricing response is virtually absent after an adjustment period of only four months

market structure and performance in european banking it is a peculiar feature of european banking markets that in almost every country a handful of large banks tend to emerge over time whether through government encouragement or the workings of the market mechanism from a general perpec tive however it is difficult to evaluate the competitive implications of increased concentration the traditional structure conduct performance scp paradigm would suggest that increased concentration fosters collusion and anti competitive practices whereas the efficiency hypothesis suggests otherwise this paper presents tests of the two hypotheses with respect to the european banking industry using pooled and annual date for the period 1986 to 1989 the results generally support the traditional scp paradigm as an explanation for the market behaviour of european banks

collusion vs superiority a monte carlo analysis abstract this paper develops a monte carlo procedure which simulates regression equations characteristic of the profit concentration literature given knowledge lacking in empirical work of the underlying parameters true values it is shown that concentration s coefficient in an industry profit concentration regression may overestimate underestimate or accurately reflect the impact of monopoly power on price depending on the assumed underlying model current empirical evidence however tends to be more consistent with the model that predicts concentration overestimates the monopoly power effect

price asymmetry in the dutch retail gasoline market abstract this article analyses the retail price adjustments in the dutch gasoline market we estimate an asymmetric error correction model on weekly price changes for the years 1996 2001 we construct five datasets one for each working day the conclusions on asymmetric pricing are shown to differ over these datasets suggesting that the choice of the day for which the prices are observed matters more than commonly believed in our view the insufficient robustness of the outcomes might explain the mixed conclusions found in the literature using these two approaches we also show that the effect of asymmetry on the dutch consumer costs is negligible

testing for asymmetric pricing in the canadian retail gasoline market abstract this paper applies a threshold regression model to test for asymmetric pricing in the retail gasoline market in canada using weekly data for the period january 1990 to december 1996 we present results for 13 canadian cities for both premium and regular gasoline within the context of an error correction model we test for the presence of asymmetric price behaviour using average changes in crude prices as well as various lags for the change in crude as possible thresholds we are unable to find any evidence to support this view

rockets and feathers the asymmetric speed of adjustment of uk retail gasoline prices to cost changes abstract the paper develops a quadratic quantity adjustment model to test the hypothesis put forward in the recent monopolies and mergers commission report that the speed of adjustment of uk retail gasoline prices to cost changes is more rapid when costs rise than when they fall and that the adjustment path is more concentrated around the mean value on the upswing using data from 1982 to 1989 evidence of faster and more concentrated responses to cost increases were found

quantitative methods in credit management a survey many static and dynamic models have been used to assist decision making in the area of consumer and commercial credit the decisions of interest include whether to extend credit how much credit to extend when collections on delinquent accounts should be initiated and what action should be taken we survey the use of discriminant analysis decision trees and expert systems for static decisions and dynamic programming linear programming and markov chains for dynamic decision models since these models do not operate in a vacuum we discuss some important aspects of credit management in practice e g legal considerations sources of data and statistical validation of the methodology we provide our perspective on the state of the art in theory and in practice

the competitive dynamics of geographic deregulation in banking implications for productive efficiency deregulation of geographic restrictions in banking over the past 20 years has intensified both potential and actual competition in the industry the accumulating empirical evidence suggests that potential efficiency gains associated with consolidating banks are often not realized we evaluate the impact of this increased competition on the productive efficiency of nonmerging banks confronted with new entry in their local markets and find that the incumbent banks respond by improving cost efficiency thus studies evaluating the impact of bank mergers on the efficiency of the combining parties alone may be overlooking the most significant welfare enhancing aspect of merger activity

domestic and international determinants of bank profits foreign banks in australia abstract this paper develops and tests a model that integrates the existing multinational bank literature with the domestic bank profits literature using data for australia this paper demonstrates that an integrated model results in a small increase in explanatory power when compared to models drawn solely from the multinational banking literature the paper finds that profits are a negative function of competitor market share and bank licence status and a positive function of australian size and home gdp growth it is argued that there is incomplete integration between the market segments of domestic and multinational banks due to the first mover advantages of incumbent banks

competition and geographical integration in commercial bank lending abstract this paper tests the hypothesis that interest rates on bank commercial loans in the regions of the united states are generated in an integrated national market the tests of a joint hypothesis compounded of integration behavioral models and the absence of systematic errors in the data are applied to 60 series of data short term and long term loans in five size classes in six regions the joint hypothesis is not rejected for five of the six regions and four of the five size classes the exceptional region is the southeast the exceptional loan size class is 1 000 to 9 000 the smallest in the sample

scale and scope economies in the multi product banking firm abstract the multi product nature of the banking firm is examined utilizing the translog cost function this analysis indicates that contrary to conventional wisdom natural monopoly scale economies and product specific decreasing costs are not robust characterizations of the banking industry there is however evidence that the cost function is characterized by economies of scope the implications of these results are discussed and extensions of this approach suggested

hidden effects of bank recapitalizations abstract given the importance of capital regulation in the banking industry how and why a bank s behavior reacts to a recapitalization has profound consequences to this end we investigate the effects of 306 seasoned equity offerings seos conducted by listed european banks between 2002 and 2014 we use propensity score matching and find that seos lead to asset expansion as opposed to any deleveraging further we find a decrease in lending in the short term followed by a subsequent increase a reduction in profitability and an increase in systemic risk regulators might not have fully considered this last negative externality when they imposed the tougher basel iii capital requirements the effects of seos strongly depend on the reasons behind the recapitalizations

testing the adequacy of markov chain and mover stayer models as representations of credit behavior we summarize methodology for testing the compatibility of discrete time stochastic processes stationary and nonstationary markov chains and an extension the mover stayer model with longitudinal data from an unknown empirical process we apply this methodology to determine the suitability of these models to represent the payment behavior of a sample of retail revolving credit accounts we are led to reject stationary and also nonstationary markov chain models for our data and for our state space definition in favor of the mover stayer model the mover stayer model in contrast to markov chains incorporates a simple form of population heterogeneity stationary markov chains have been used extensively in finance literature to model payment behavior of credit accounts our empirical study suggests however that stationary markov chains may not appropriately model payment behavior it also indicates that incorporating heterogeneity in modeling payment behavior may be more important than incorporing nonstationarity

prices rise faster than they fall output prices tend to respond faster to input increases than to decreases this tendency is found in more than two of every three markets examined it is found as frequently in producer goods markets as in consumer goods markets in both kinds of markets the asymmetric response to cost shocks is substantial and durable on average the immediate response to a positive cost shock is at least twice the response to a negative shock and that difference is sustained for at least five to eight months unlike past studies which documented similar asymmetries in selected markets gasoline agricultural products etc this one uses large samples of diverse products 77 consumer and 165 producer goods accordingly the results suggest a gap in an essential part of economic theory as a start on filling this gap the study finds no asymmetry in the resonse of an individual decision maker a supermarket chain to its costs but it finds above average asymmetry where a cost shock is filtered through a fragmented w

sticky prices inventories and market power in wholesale gasoline markets a model with costly adjustment of production and costly inventories implies that wholesale gasoline prices will respond with a lag to crude oil cost shocks unlike explanations that rely upon menu costs imperfect information or long term buyer seller relationships this model predicts that futures prices for gasoline will adjust incompletely to crude oil price shocks that occur close to the expiration date of the futures contract we test and confirm this implication examining wholesale price responses in 188 gasoline markets we also find that firms with market power adjust prices more slowly than do competitive firms consistent with the model

dynamic pricing in retail gasoline markets supergame models of tacit collusion show that supportable price cost margins increase with expected future collusive profits ceteris paribus as a result collusive margins will be larger when demand is expected to increase or marginal costs are expected to decline using panel data on sales volume and gasoline prices in 43 cities over 72 months we find behavior consistent with tacit collusion in retail gasoline markets controlling for current demand and cost current margins increase with expected next month demand and decrease with expected next month cost the results are not consistent with intertemporal l inkages due to inventory behavior or customer loyalty

firm growth and efficiency in the banking industry a new test of the efficient structure hypothesis abstract in this paper we propose a new test of the efficient structure es hypothesis which predicts that efficient firms come out ahead in competition and grow as a result our test has significant advantages over existing ones because it is more direct and can jointly test the so called quiet life hypothesis which predicts that in a concentrated market firms do not minimize costs we then apply this test to large banks in japan consistent with the es hypothesis we find that more efficient banks become larger we also find that market concentration reduces banks efficiency which supports the quiet life hypothesis these findings imply that there is an intriguing growth efficiency dynamic throughout banks life cycle although our findings also suggest that the es hypothesis dominates the quiet life hypothesis in terms of economic impact

symmetric or asymmetric price adjustments in the oil market an empirical analysis of the relations between international and domestic prices in the federal republic of germany 1972 89 abstract this paper investigates how german consumer and wholesale prices for gasoline and light heating oil react to changes in the corresponding rotterdam prices monthly data from 1972 to 1989 are employed and the subperiods of the 1970s 1972 to 1979 and 1980s 1980 1989 are distinguished error correction models are estimated to seperate long run equilibrium relations and short run adjustment processes for the 1980s we find rapid symmetric and full adjustment of the german prices to the rotterdam prices whereas during the 1970s we find some asymmetries and at least for gasoline the adjustment processes took considerably more time

single equation multiple regression methodology is it an appropriate methodology for the estimation of the structure performance relationship in banking abstract tests of the structure performance paradigm of the industrial organization literature have been carried out almost exclusively using a single equation multiple regression methodology the purpose of this paper is to suggest that where the firms being considered are multiple product in nature and may pursue objectives in addition to maximizing the value of the firm such a methodology may be inappropriate the results presented in this paper suggest that the absence of a consistently strong positive and statistically significant relationship between market concentration and bank profitability may be traced in part to such an inappropriate methodology

collusion efficiency and pricing behavior evidence from the banking industry this paper examines the validity of competing hypotheses used to explain the observed positive relationship between concentration and profits using price proxies from the banking industry we find that leading secondary firms in a market act as price setters price takers this is true regardless of market concentration we interpret this as evidence of the superior efficiency of leading firms and conclude that the higher profits earned by these firms is due to their superior efficiency and not collusive behavior

the economic effects of foreign bank presence evidence from the philippines abstract this study examines the economic effects of the liberalization of foreign bank entry in the philippines from 1990 to 2006 the findings provide strong evidence on the dominance of competition effects from foreign bank presence which lead to the reduction in the profitability and overhead costs of domestic commercial banks these findings which reveal that both the actual market penetration and mere presence of foreign banks seem to exert competitive pressure to domestic banks imply that foreign banks may serve as an effective competitive force reducing the excess profits earned by domestic banks and compelling domestic banks to update their production technologies and techniques to improve their cost efficiency from a policy perspective the findings on competition effects of foreign banks in the domestic banking system justify the liberalization of foreign bank entry in the philippines the main findings demonstrate that the goal of banking liberalization in transforming domestic banks to be more competitive and efficient works considerably well in the case of the philippines aside from the policy of easing the entry of foreign banks bank specific conditions can have significant impact on the performance of domestic banks therefore a sustained improvement in the efficiency of domestic commercial banks requires not only liberalizing the entry of foreign banks but also on continued strengthening of domestic prudential regulation and supervision on the commercial banking system

the effects of reform on china s bank structure and performance abstract this paper investigates the relationship between market structure and performance in china s banking system from 1985 to 2002 a period when this sector was subject to gradual but notable reform using panel data estimation techniques both the market power and efficient structure hypotheses are tested in addition the model is extended to consider issues such as the impact of bank size ownership and whether the big four banks enjoy a quiet life on average x efficiency declined significantly and most banks were operating below scale efficient levels estimation of the structure performance models lends some support to the relative market power hypothesis in the early period the reforms had little impact on the structure of china s banking sector though the joint stock banks became relatively more x efficient there was no evidence to support the quiet life hypothesis probably because strict interest rate controls prevented the state banks from earning monopoly profits thus the ongoing liberalisation of interest rates should be accompanied by reduced concentration overall to improve competitive structure new policies should be directed at encouraging market entry and increasing the market share of the most efficient banks

to be different or to be the same it s a question and theory of strategic balance this paper addresses the performance consequences of firm level strategic similarity past research observed that firms face pressures to be different and to be the same by differentiating firms reduce competition by conforming firms demonstrate their legitimacy both reduced competition and legitimacy improve performance this paper begins building a theory of strategic balance by synthesizing the differentiation and conformity perspectives the theory directs attention to intermediate levels of strategic similarity where firms balance the pressures of competition and legitimation empirical support for the theory is found in a longitudinal study of commercial banks several suggestions for developing a theory of strategic balance conclude the paper the theory s major implication is that firms should be as different as legitimately possible copyright 1999 john wiley sons ltd

what is the impact of bankrupt and restructured loans on japanese bank efficiency the japanese banking system provides a distinctive platform for the examination of the long lasting effect of problem loans on efficiency we measure technical efficiency by modifying a translog enhanced hyperbolic distance function with two undesirable outputs identified as problem loans and problem other earning assets our unique database allows us to distinguish between bankrupt and restructured loans to investigate the underlying causality between these loans and efficiency from the flexible panel vector autoregression specification primary results reveal that bankrupt loans have a positive impact on efficiency related to the moral hazard skimping hypothesis with the causality originating from bankrupt loans in contrast findings for the relationship between restructured loans and efficiency support the bad luck hypothesis

the fat years the structure and profitability of the us banking sector in the pre crisis period bank profitability in the usa was extremely high in the pre crisis period yet this did not prevent the current crisis it has become clear that these profits were on shaky grounds and also that bank profits were not used to buttress banks capital bases this paper analyses the effects of structure on profitability from 1994 to 2005 banklevel panel data are used to test the effects of concentration market power bank size and operational efficiency on profitability efficiency is not found to be a strong determinant of profitability suggesting that banks high profits during this period were not earned through efficient performance robust evidence is found that concentration increases bank profitability this holds even when the largest banks are excluded from the sample suggesting that the relationship between concentration and profitability acts in a generalised structural way and that the higher profits arising from concentration are at the expense of the rest of the economy the analysis points to various policy implications relevant to the current crisis in particular in terms of the legitimacy of expectations of the restoration of pre crisis profit rates and the need for much stronger regulation of the banking sector especially in terms of the structure of the sector pricing behaviour and use of profits

on the relationship among efficiency capitalization and risk does management matter in local banking market abstractby employing a granger causality methodology in a panel data framework this article explores the relationship among efficiency capitalization and credit risk within the local italian banking system focusing the attention on cooperative banks we specifically test whether managers take more risks in highly concentrated markets i e monopoly than in partially competitive markets i e duopoly the evidence shows that in more concentrated markets management efficiency generates a decrease in risk taking rejecting the bad management hypothesis with respect to the partially competitive markets results are consistent with the idea that banks with less local competition are able to increase their profits by indulging more freely in rent seeking behaviour minimizing their risk taking and consequently improving the quality of their assets through additional screening processes the financial crisis does not seem to affect the conduct of management in terms of bank investment decisions and risk

price adjustments by a gasoline retail chain we use daily data to examine price responses in the swedish gasoline market to changes in the rotterdam spot price exchange rates and taxes the distribution of price adjustments by a leading retail chain for the period january 1980 to december 1996 is symmetric with no small adjustments an error correction model shows that in the short run prices gradually move towards the long run equilibrium in response to cost shocks there is some evidence that also in the short run prices are stickier downwards than upwards prices respond more rapidly to exchange rate movements than to the spot market price our analysis emphasizes that to fully understand price adjustments it is necessary to examine data sets where the sample frequency at least matches that of price adjustments

determinants of bank market structure efficiency and political economy variables abstract this paper analyzes the influence of bank efficiency and political economy variables on bank market structure market share and market concentration using a panel data of 2 592 banks from 69 countries over the 1996 2002 period results indicate that the validity of the efficiency structure hypothesis to explain bank market structure varies across countries depending on national political economy variables in particular higher entry requirements more generous deposit insurance and higher extent of government bank ownership reduce the positive influence of bank efficiency on market share and market concentration however tighter restrictions on bank activities better quality of the contracting environment more market monitoring and more market orientation and development of the financial system increase the positive influence of bank efficiency on market share and market concentration jel classification g18 g21 g28 keywords banking structure efficiency regulations supervision institutions

do regulators read the literature bank merger regulation 1963 1990 during the early 1980s a series of events occurred that altered the regulatory political and scholarly underpinnings of bank merger regulation new laws that deregulated financial institutions increased actual and potential competition in banking markets consistent with the laissez faire spirit of this deregulation the reagan justice department relaxed its enforcement of the merger antitrust laws new banking cost studies produced lower estimates of optimal bank scale suggesting that small banks might be more effective rivals of large full service banks than previously thought new studies in industrial organization began to question the traditional notion that concentration and collusion are the root causes of excess profits weakening one of the primary justifications for denying mergers of banks and nonbanks alike this paper explores whether the federal reserve board of governors commercial bank merger policy changed around 1980 and whether these changes were consistent with contemporaneous regulatory political and scholarly developments the determinants of the board s merger policy both before and after the early 1980s are estimated using a binomial probit model the results suggest that the board revised its overall merger policy consistent with changes in the justice department s merger guidelines but was only marginally influenced by changes in the banking cost and industrial organization literature although merger policy became more relaxed as reagan appointees were added to the board the possibility that this loosening was a response to the increased competition in financial markets could not be dismissed

operational research and financial management abstract the use of operational research in financial management is reviewed its application to both short term problems of cash management and long term problems of capital investment is critically examined the contribution that operational research has made to modern theories of finance and their use is explored and differences in orientation are discussed the increasing complexity of financial management problems facing many corporations is providing more opportunities for the operational researcher whose role in this area is being reappraised

stochastic financial analytics for cash flow forecasting abstract accurate cash flow forecasting is essential for successful management of firms and it becomes especially critical during uncertain market and credit conditions without accurate cash flow forecasting a firm may fail to meet its short term obligations and risk bankruptcy accurate cash flow forecasting can be limited by a number of factors including changes in macro economic conditions that influence liquidity in the economy customer payment behavior that can vary from time to time as well by industry and dynamics of the particular supply chain itself we develop stochastic financial analytics for cash flow forecasting for firms by integrating two models 1 markov chain model of the aggregate payment behavior across all customers of the firm using accounts receivable aging and 2 bayesian model of individual customer payment behavior at the individual invoice level as the stochastic dynamics of cash flow evolves every day the forecast can be updated every time an invoice is paid the proposed model is back tested using empirical data from a small manufacturing firm and found to differ 3 6 from actual monthly cash flow and differs approximately 2 4 compared to actual annual cash flow the forecast accuracy of the proposed stochastic financial analytics model is found to be considerably superior to other techniques commonly used furthermore in computer simulation experiments the proposed model is found to be largely robust to supply chain dynamics including when subjected to severe bullwhip effect the proposed model has been implemented in excel which allows it to be easily integrated with the accounts receivable aging data making it practicable for small and large firms

commercial bank ownership and performance in china this study examines the determinants of bank performance based on proxy variables that assess the quality of assets profitability liquidity and overall performance using a sample of 111 chinese commercial banks over the period of 2000 2012 we find that foreign banks appear to have better asset quality and overall performance although lower profitability compared to domestic banks in contrast the state owned banks tend to be more profitable and have better liquidity position compared with other domestic banks and foreign banks at bank level equity liability ratio exerts significant influence on overall bank performance while at the macroeconomic level per capital gdp gdp growth inflation and unemployment rates appear to have a bearing on bank performance

does market structure matter on banks profitability and stability emerging vs advanced economies abstract we empirically investigate the effects of market structure on profitability and stability for 1929 banks in 40 emerging and advanced economies over 1999 2008 by incorporating the traditional structure conduct performance scp and relative market power rmp hypotheses we observe that a greater market share leads to higher bank profitability being biased toward the rmp hypothesis in advanced economies yet neither of the hypotheses is supported for profitability in emerging economies the scp appears to exert a destabilising effect on advanced banks suggesting that a more concentrated banking system may be vulnerable to financial instability however the rmp seems to perform a stabilising effect in both economies evidence also highlights that profitability and stability increase with an increased interest margin revenues in a less competitive environment for emerging markets overall these results suggest that although policy measures to promote competition may dampen economic rent excessive implementation may have an undesired destabilising impact on banks

note on the cyert davidson thompson doubtful accounts model the results of the classical cyert davidson and thompson cdt model for estimating the allowance for doubtful accounts could be made more valuable by correcting one flaw the cdt model rests on the total balance method of aging dollars and as presented its answers cannot wisely be applied to estimate real dollar amounts notably the steady state distributions derived by the model tend to underestimate actually paid dollar amounts

regulations market structure institutions and the cost of financial intermediation this paper examines the impact of bank regulations market structure and national institutions on bank net interest margins and overhead costs using data on over 1400 banks across 72 countries while controlling for bankspecific characteristics the data indicate that tighter regulations on bank entry and bank activities boost the cost of financial intermediation inflation also exerts a robust positive impact on bank margins and overhead costs while concentration is positively associated with net interest margins this relationship breaksdownwhencontrolling for regulatory impediments to competition and inflation furthermore bank regulations become insignificant when controlling for national indicators of economic freedom or property rights protection while these institutional indicators robustly explain cross bank net interest margins and overhead expenditures thus bank regulations cannot be viewed in isolation they reflect broad national approaches to private property and competition

multimarket contact competition and pricing in banking abstract in this paper we assess the impact of multimarket contact of banks on their market power by means of a simultaneous equation model in which the divergence of price from marginal cost is a function of multimarket linkages the model is estimated using aggregate data from the italian regions for the years 1997 2009 our results show that multimarket contact is positively and significantly correlated to the market power index and is also connected to both home and non home market concentration the evidence is robust to changes in model specification and multimarket contact measures and supports the idea that firms which have a greater amount of contact are more likely to collude

asymmetric fuel price responses under heterogeneity we explore the effect of cross sectional aggregation of data on estimation and test of asymmetric retail fuel price responses to wholesale price shocks the analysis is performed on data collected daily from individual fuel stations in the spanish metropolitan areas of madrid and barcelona while the standard ols estimator is applied to an error correction model in the case of the aggregated time series we use the mean group approaches developed by pesaran and smith 1995 and pesaran 2006 to estimate the short and long run micro relations under heterogeneity we found remarkable differences between the results of estimations using aggregated and disaggregated data which are highly robust to both datasets considered our findings could help to explain many of the results in the literature on this research topic on the one hand they suggest that the typical estimation with aggregated data clearly tends to overestimate the persistence of shocks on the other hand we show that aggregation may generate a loss of efficiency in econometric estimates that is sufficiently large to hide the existence of the rockets and feathers phenomenon

the structure performance relationship for european banking abstract the relationship between market structure and performance has been studied extensively for american banking in contrast little work has been done to investigate this relationship for european banking two explanations of a positive correlation between profitability and concentration have been advanced the traditional structure performance hypothesis scp and the efficient structure hypothesis previous empirical tests of the alternative hypotheses have yielded mixed results but the tests were not robust because they did not incorporate measures of efficiency directly in the model this study applies a stochastic cost frontier as proposed by aigner et al 1977 to derive measures of x inefficiency and scale inefficiency under the assumption that the errors are distributed half normal we incorporate these measures of inefficiencies directly into the tests as proposed by berger and hannan 1993 we do not find a positive and significant relationship between concentration and profitability for a sample of banks across 11 european countries over a four year period 1988 1991 however we do find evidence to support one of the two versions of the efficient structure hypothesis for banks located in countries with low concentration of banks since little support is found for either of the scp hypotheses a simple policy of strict limitations on cross border acquisitions and growth is not warranted

concentration and other determinants of bank profitability in europe north america and australia abstract this study reviews the performance of banks in twelve countries or territories in europe north america and australia and examines the internal and external determination of profitability to circumvent some of the difficulties in making comparisons between banks in different countries the concept of value added is introduced results parallel those in domestic u s studies and provide some support for the edwards heggestad mingo hypothesis of risk avoidance by banks with a high degree of market power

the impact of bank capital on profitability and risk in asian banking abstract this article applies the generalized method of moments technique for dynamic panels using bank level data for 42 asian countries over the period 1994 to 2008 to investigate the impacts of bank capital on profitability and risk ignoring influence factors the extant literature presents an ambiguous impact of bank capital on profitability risk however when the effects from the influencing factors are taken into consideration three conclusions are reached first along with the change in the categories of banks investment banks have the lowest and positive capital effect on profitability whereas commercial banks reveal the highest reverse capital effect on risk second banks in low income countries have a higher capital effect on profitability banks in lower middle income countries have the highest reverse capital effect on risk while banks in high income countries have the lowest values third banks in middle eastern countries own the highest and positive capital effect on profitability far east central asian banks have the largest reverse capital effect on risk while the lowest value occurs in middle eastern countries banks finally our results also reveal that persistence of profit is greatly affected by different profitability variables and all risk variables show persistence from one year to the next

do gasoline prices respond asymmetrically to crude oil price changes the authors test and confirm that retail gasoline prices respond more quickly to increases than to decreases in crude oil prices among the possible sources of this asymmetry are production inventory adjustment lags and market power of some sellers by analyzing price transmission at different points in the distribution chain the authors attempt to shed light on these theories spot prices for generic gasoline show asymmetry in responding to crude oil price changes which may reflect inventory adjustment effects asymmetry also appears in the response of retail prices to wholesale price changes possibly indicating short run market power among retailers