New Economics Papers
on Banking
Issue of 2008‒11‒18
four papers chosen by
Roberto J. Santillán–Salgado, EGADE-ITESM

  1. The Assessment of Banking Performances- Indicators of Performance in Bank Area By caruntu, genu alexandru; romanescu, marcel laurentiu
  2. X-efficiency versus Rent Seeking in Chinese banks: 1997-2006 By Matthews, Kent; Guo, Jianguang; Zhang, Xu
  3. Determinants of domestic and cross-border bank acquisitions in the European Union By Ignacio Hernando; María J. Nieto; Larry Wall
  4. Branch Expansion of Commercial Banks in Rural America By Nam, Sangjeong; Ellinger, Paul N.

  1. By: caruntu, genu alexandru; romanescu, marcel laurentiu
    Abstract: Profitability is a management concept with the objective of assessment bank's results from efficiency point of view both for entirely activity and for differently management compounds.From conceptual point of view, profitability represents the modality to achieve the major goal of bank's activity, respectively the maximization of profit in minimization risk conditions. The approach from a quality perspective of activity results conducts to assessment of application modalities of different compunds of management, in comparison to the strategy elements, thus must to result the concrete degree to achieve the politic and banking strategy compunds.
    Keywords: profitability; assets; balance; rentability
    JEL: P47 G32 P1 H63
    Date: 2008–10–16
  2. By: Matthews, Kent (Cardiff Business School); Guo, Jianguang; Zhang, Xu
    Abstract: This study demarcates cost-inefficiency in Chinese banks into X-inefficiency and rent-seeking-inefficiency. A protected banking market not only encourages weak management and X-inefficiency but also public ownership and state directed lending encourages moral hazard and bureaucratic rent seeking. This paper uses bootstrap non-parametric techniques to estimate measures of X-inefficiency and rent-seeking inefficiency for the 4 state owned banks and 10 joint-stock banks over the period 1997-2006. The paper adjusts for the quality of loans by treating NPLs as a negative output. The paper shows that Chinese banks have reduced cost inefficiency and reduced X-inefficiency at a faster rate than rent-seeking inefficiency.
    Keywords: Bank Efficiency; China; X-inefficiency; DEA; Bootstrapping
    JEL: D23 G21 G28
    Date: 2008–11
  3. By: Ignacio Hernando (Banco de España); María J. Nieto (Banco de España); Larry Wall (Federal Reserve Bank of Atlanta)
    Abstract: This paper analyzes the determinants of bank acquisitions both within and across countries in the EU-25 over the period 1997-2004. The findings of this paper are broadly in line with those of the academic literature on the subject, which are mainly based on the US experience. Our results suggest poorly managed EU-25 banks (high cost to income) are more likely to be acquired by other EU-25 banks, in the same country. Nevertheless, this underperformance of target banks does hold for cross border bank acquisitions only if compared to the median of the market. Larger banks are more likely to be acquired by other banks in the same country. The probability of being acquired by another bank in the same market is larger for banks that are quoted in the stock market, which is consistent with the disciplinary character of listing in the stock markets. Finally, banks operating in more concentrated markets are less likely to be acquired by other banks operating within the same country but are more likely to be acquired by banks in other EU-25 countries.
    Keywords: bank acquisitions, merger gains, probability of acquisition
    JEL: G21 G34
    Date: 2008–11
  4. By: Nam, Sangjeong; Ellinger, Paul N.
    Abstract: The main objective of this study is to identify the financial and market characteristics of commercial banks' branch expansion decision. The nested logit model is used to analyze the characteristics to affect the expansion decision and location choice of commercial banks due to a two-level nesting structure for branch expansion decision. The probability that banks with high deposit growth rate, assets, loan to deposit ratio or more branches open branches in rural area is less than the probability that those open branches in both areas. However, banks with high deposit growth rate, asset, loan to deposit ratio, agricultural loan rate, ROA and rural head office are more likely to open branches in both areas rather than in urban area.
    Keywords: Community/Rural/Urban Development,
    Date: 2008

This issue is ©2008 by Roberto J. Santillán–Salgado. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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