market structure and price cost margins in philippine manufacturing industries we test the hypothesis that variations in industry price cost margins pcm performance are explained by sellers various structure and conduct variables such as sellers concentration i e hhi for value added capital output ratio barrier to entry industry demand growth rate import penetration export share and degree of foreign participation multinational in four digit philippines standard industrial classification manufacturing industries the statistical analyses are a series of multiple regression equations relating the pcm to the previously mentioned explanatory variables estimation results show a generally positive relationship between sellers concentration capital intensity degree of foreign participation and the pcm industry growth rate may either increase or reduce pcm imports and exports lower pcm

a comparative study of efficiency in european banking this paper investigates whether there has been an improvement in and convergence of productive efficiency across european banking markets since the creation of the single internal market using efficiency measures derived from dea estimation the determinants of european bank efficiency are evaluated using the tobit regression model approach the established literature on modelling the determinants of bank efficiency is then extended by recognizing the problem of the inherent dependency of dea efficiency scores when used in regression analysis to overcome the dependency problem a bootstrapping technique is applied overall the results suggest that since the eu s single market programme there has been a small improvement in bank efficiency levels although there is little evidence to suggest that these have converged the results also suggest that inference on the determinants of bank efficiency drawn from non bootstrapped regression analysis may be biased and misleading

collusion analysis of the alabama liquid asphalt market the alabama liquid asphalt market in the usa is examined over the period 1961 1978 for evidence of activity consistent with collusion some 14 conditional collusion facilitating factors that could influence a market s tendency towards collusion not all equally important or necessarily in agreement with every other factor were considered while some of these factors are controversial and can help or harm a collusion the net balance of factors and all of the important factors and evidence pointed towards being consistent with a conspiracy while not examined as extensively it was also found that the circumstantial evidence in the market was also consistent with collusion this article suggests a procedural methodology for initiation and resolution of suspected collusion for determining appropriate damages while the precise law and damages allowed will be country specific the general methodology should have wide application in many countries whose laws attempt to foster and preserve competition and pun

foreign owned insurer performance in the us property liability markets foreign owned property liability insurers have increased their market share in the us in the recent decades they may have achieved this by being more efficient by undercutting prices to attract away business from their domestic rivals or both we investigate return risk efficiency and determinants of efficiency performance of these insurers relative to their domestic competitors we find that these firms are less profitable and less efficient in terms of cost scale and revenue x efficiencies but more efficient in terms of cost x and revenue scale efficiencies overall the evidence shows that both of the aforementioned factors have contributed to their growth

hot money inflows and monetary stability in china how the people s bank of china took up the challenge nonforeign direct investment capital inflows in china were particularly strong in 2003 and 2004 they have led to a rapid accumulation of international reserves and they may have provided excess liquidity to the chinese economy this article investigates how the central bank of china managed the rapid build up of international reserves in 2003 and 2004 the relationship between real international reserves and real domestic credit is examined with a vector error correction model estimated on monthly data from january 1997 to march 2006 empirical results show that this relationship was negative which suggests that the central bank succeeded in slowing down real domestic credit when real international reserves increased direct and indirect granger causality tests are implemented to show how the people s bank of china proceeded to control domestic credit

the comparative efficiency performance of small and large us commercial banks in the pre and post deregulation eras the purposes of this paper are twofold first to employ a flexible non parametric approach to contrast the productive efficiency of a sample of small and large banks in order to examine the relationship between size and productive performance in the banking industry second to investigate whether the relative efficiency performance of small and large banks has changed following the changes in the banking environment in the 1980s and to contrast the rate of technological change achieved by these two groups of banks over this time period the findings based on group specific frontiers suggest that in the pre deregulation environment small banks were more efficient than the large banks while in the deregulated environment small and large banks were equally efficient moreover the dispersion in the efficiency measures of the small banks is found to have increased substantially while that of the large banks changed little over the sample period

family control and loan collateral evidence from china using a sample of 612 listed chinese non soes from 2006 to 2009 we show that the use of collateral is higher in family controlled firms this effect is more pronounced when family firms have a larger control ownership wedge family representation in management and are led by a descendant chairman ceo we further document that having multiple large shareholders paying higher dividends having completed the split share structure reform and being located in provinces with more competitive credit markets can mitigate the incentive of controlling families to engage in expropriation and reduce the level of collateral required overall we contend that in china the risk of expropriation associated with family control leads to an increased credit risk and in turn higher collateral being required by banks

cost efficiency and banking performances in a partial universal banking system application of the panel smooth threshold model this paper studies the cost efficiency of bank in a partial universal banking system pubs taiwan instead of assuming one common technology in the bank cost function two technologies are assumed to be imbedded in the cost function fee revenues are used as threshold to divide the banks into two technologies a bank whose fee revenues exceeding the threshold is designated as universal bank technology while falling below the threshold is designated as traditional deposit loan technology the panel smooth transition model is adopted which allows banks to smoothly adjust between the two technologies two criteria are suggested overbanking and the trend toward fee revenues to assess the new model s performances with respect to scale economies the results do find a panel smooth transition model yield more reasonable results than the conventional ols and random effect of panel data approach based on the panel smooth transition model the optimal fixed asset size is around ten billion new taiwan dollars

systematic departures from the frontier a framework for the analysis of firm inefficiency departures from a production or cost frontier may reflect the systematic effect of conditions that contribute to inefficiency to test whether some portion of frontier function departures can be systematically explained the frontier inefficiency error component is modeled as a function of various causal factors and a random component the functional form of the inefficiency error term model is chosen to assure strict one sidedness preliminary empirical results generated from electric utility data suggest the superiority of including both systematic and random components in the inefficiency error term

bank ownership privatization and performance evidence from a transition country abstract this paper combines the static effect of ownership and the dynamic effect of privatization on bank performance in china over 1995 2010 reporting a significantly higher performance by private intermediaries joint stock commercial banks and city commercial banks relative to state owned commercial banks however publicly traded banks subject to multiple monitoring and vetting in capital markets perform better regardless of ownership status the privatization of banks has improved performance with respect to revenue inflow and efficiency gains in the short or long run initial public offerings the positive long run effect is more relevant and significant for banking institutions with minority foreign ownership moreover this paper innovatively estimates interest income efficiency and non interest income efficiency at the same time the results suggest that chinese banks are much more efficient in generating interest income than raising non interest revenue although the latter aspect has improved significantly during the sample period

threshold effects of financial status on the cost frontiers of financial institutions in nondynamic panels this article applies hansen s 1999 2000 threshold regression model to estimate translog cost frontiers in the hope of shedding light on the banking industry s production processes and the extent of its technical efficiency te the threshold technique allows for the existence of multiple technologies of production distinguished by an exogenous threshold variable strong evidence of multiple technologies is found in the industry irrespective of which financial indicator as constructed by factor analysis defines the threshold variable cost savings and scale economies among the various underlying technologies are compared herein we also highlight the differences between the threshold results and the conventional cost frontier

a mnemonic for the major factors influencing the likelihood of collusion in the typical industrial organization textbook and class and in the courtroom numerous factors are identified as providing a predisposition to a cartel these factors include cost differences product differentiation number of firms technology growth of the industry elasticity frequency of sales number and size distribution of sellers and buyers discount rate type of competition vertical integration cost ratio imports sealed bidding social structure and track record future expectations recognition of interdependence announcements and exchanges of economic information multimarkets etc there are many factors to keep in mind fortunately the accumulated theoretical and empirical work on collusion suggests that we can for all practical purposes focus on the factors contained in the mnemonic word cartel the key factors are concentration additional revenue talk entry likeness

banking reforms performance and risk in china we investigate the impact of the banking reform started from 2005 on ownership structures in china on commercial banks profitability efficiency and risk over the period 2000 2012 providing comprehensive evidence on the impact of banking reform in china we find that banks on average tend to have higher profitability lower risk and lower efficiency after the reforms and the results are robust with our difference in difference approach our results also show that the big 5 state owned banks socb underperform banks with other types of ownership when risk is measured by non performing loans npls over the entire study period but tend to have fewer npls than other banks during the post reform period our results provide some supporting evidence on the ongoing banking reforms in china suggesting that attracting strategic foreign investors and listing socbs on stock exchanges appear to be effective ways to help socbs deal with the problem of npls and manage their risk

financial liberalization and bank efficiency a comparative analysis of india and pakistan this paper provides a comparative analysis of the evolution of the technical efficiency of commercial banks in india and pakistan during 1988 1998 a period characterized by far reaching changes in the banking industry brought about by financial liberalization data envelopment analysis is applied to two alternative input output specifications to measure technical efficiency and to decompose technical efficiency into its two components pure technical efficiency and scale efficiency the consistency of the estimated efficiency scores are checked by examining their relationship with three traditional non frontier measures of bank performance in addition the relationship between bank size and technical efficiency is examined it is found that the overall technical efficiency of the banking industry of both countries improved gradually over the years especially after 1995 unlike public sector banks in india public sector banks in pakistan witnessed improvement in scale efficiency only it is also found that banks are relatively more efficient in generating earning assets than in generating income this is attributed to the presence of high non performing loans in addition it is found that the gap between the pure technical efficiency of different size groups has declined over the years

does bank efficiency matter market value relevance of bank efficiency in australia the stochastic frontier analysis is employed to investigate efficiency of publicly listed australian banks over the period 1985 to 2008 the results suggest that technical cost and profit efficiency of australian banks have improved over time large banks have attained a higher level of cost efficiency but a lower level of technical efficiency compared to small banks no substantial difference between the two groups is found in terms of profit efficiency a panel regression of bank stock return on bank efficiency suggests that an improvement in technical cost or profit efficiency contributes to the market value of a bank thus the shareholder wealth maximization goal is aligned with the goal of maximizing bank efficiency in the australian context

wto challenges and efficiency of chinese banks after joining the world trade organisation wto in december 2001 china was given 5 years to completely open up its banking market for international competition chinese banks have been renowned for their mounting nonperforming loans and low efficiency despite gradual reforms the banking system is still dominated by state ownership and encapsulated monopolistic control how to raise efficiency is a key to the survival and success of domestic banks especially the state owned commercial banks two important factors may be responsible for raising efficiency ownership reform and hard budget constraints this article uses a panel data of 22 banks over the period 1995 to 2001 and employs a stochastic frontier production function to investigate the effects of ownership structure and hard budget constraint on efficiency empirical results suggest that nonstate banks were 8 18 more efficient than state banks and that banks facing a harder budget tend to perform better than those heavily capitalized by the

market structure and cyclical fluctuations in u s manufacturing comment r ian domowitz glenn hubbard and bruce c peterson 1988 estimate industry markups of price over marginal cost and show the influence of market structure on cyclical movements in total factor productivity using a disaggregate panel data set of 284 four digit standard industrial classification industries in this comment the authors examine whether domowitz hubbard and peterson really estimate what they intend to estimate domowitz hubbard and peterson also claim their estimates are not as large as those of hall if it is not clear what they estimate the comparison is of limited usefulness nevertheless the domowitz hubbard and peterson study deserves consideration and contemplation by anyone interested in industrial economics copyright 1993 by mit press

the effect of risk based capital requirements on profit efficiency in banking the purpose of this paper is twofold to show how to measure profit efficiency in banking using a newly developed technique and to use that technique to determine the effect of risk based capital requirements on the profit performance of us banks the measure of profit efficiency used captures deviations from profit maximization arising from technical inefficiency caused by a lack of managerial oversight and allocative inefficiency which is caused by managers choosing a nonoptimal mix of inputs and outputs a leverage ratio constraint and a risk weighted capital ratio constraint are explicitly included in the model which allows identification of the effect on profits of those constraints the techniques are applied to random samples of us banks for 1990 1992 and 1994 the results indicate that allocative inefficiency is a larger source of profit loss than technical inefficiency and that the risk based capital standards have a significant effect on bank allocative efficiency

explaining efficiency differences among large german and austrian banks cost efficiency scale efficiency and productivity change are estimated by data envelopment analysis and cost efficiency is regressed on explanatory variables no evidence is found for average productivity responding to deregulation over the period studied state owned banks are found to be more cost efficient likely owing to cheaper funds and cooperative banks to be about as cost efficient as private banks increasing economies of scale but decreasing economies of scope provide rationale for m as among banks with similar product portfolios interbank and capital market funding is found to be more cost efficient than deposits when the cost of retail networks is controlled

global economic change labour market adjustment and the challenges for european housing policies this paper examines the global competition aspects of housing policies and the implications of an emerging flexible economic order for housing markets in advanced economies an overview is given of movements in international patterns of growth and trade including a review of the effects on labour and housing markets of increased competition from less developed and newly industrialised countries uk labour market experience is examined along with the responses of and implications for housing systems and policies emphasis is placed on the need to understand the connections between global economic change and regional local housing systems when designing housing policy the paper underlines the importance of integrating housing strategies with national competition policy

x efficiency and scale economies in policing a comparative study using the distribution free approach and dea this study uses both parametric and nonparametric techniques to analyse scale economies and relative efficiency levels in policing in england and wales both techniques suggest the presence of significant scale effects in policing and considerable divergence in relative efficiency levels across police forces

world financial crisis and efficiency of chinese commercial banks the us credit crunch generated substantial turmoil in the global financial markets and directly caused the collapse of several world banking giants nonetheless chinese commercial banks decoupled from the rest of the world achieved remarkable results because of their risk averse nature and banking reform during the past 10 years to improve corporate governance and efficiency the latest reform was focused on ownership transformation via foreign participation and stock listing employing data of 14 listed chinese banks during the period 1999 2008 this paper tests whether ipo was an effective way to enhance banks efficiency using two frontier approaches data envelopment analysis and sfa the results confirm our hypothesis and suggest that restructuring banks into shareholding companies improves both technical efficiency and scale economies this conclusion is further confirmed by the technical inefficiency effects model which found that efficiency rating of listed banks was about 5 per cent higher than their prior ipo level facing tougher economic condition and increased competition banks not only need to broaden income sources cut expenditures but more importantly to strengthen their risk management to become more resistant to a volatile business environment

technical efficiency and scale efficiency in the italian banking sector a non parametric approach measures of technical and scale efficiencies are derived in the italian banking industries by implementing non parametric data envelopment analysis on a cross section of 174 italian banks taken in 1991 the methodology of the parametric and non parametric approaches to measure efficiency are discussed the existence of both technical and allocative efficiency is established this result is robust to modifications in the specification of inputs and outputs suggested by the intermediation approach and by the asset approach in implementing both the intermediation and the asset approach the traditional specification of inputs is modified to allow an explicit role for financial capital in addition regression analysis is used on a bank specific measure of inefficiency to investigate determinants of banks efficiency efficiency is best explained by productive specialization size and to a lesser extent by location