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Article
Publication date: 13 July 2015

Stefano Dell'Atti, Vincenzo Pacelli and Gilda Mazzarelli

The purpose of this paper is twofold. First, it aims to measure and compare the efficiency change of French, German, Italian, Spanish and UK banking groups in a context of…

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Abstract

Purpose

The purpose of this paper is twofold. First, it aims to measure and compare the efficiency change of French, German, Italian, Spanish and UK banking groups in a context of financial crisis, over the period 2006-2010; second, it attempts to analyse the internal and environmental determinants of banking groups efficiency.

Design/methodology/approach

In this paper the efficiency is estimated by a two-stage semi-parametric procedure. In the first stage, we build a common production frontier across countries using the data envelopment analysis (DEA) (Debreu, 1951; Farrell, 1957). To further analyse the efficiency changes over years we use the Malmquist total factor productivity index, based on DEA technique. In the second stage, in order to determine the factors that impact on bank efficiency, the authors perform a bootstrapped truncated regression model with discretionary inputs as independent variables, following Simar and Wilson (2007).

Findings

The empirical results show that overall the “large” banking groups are more efficient than the “small” ones. However the Malmquist total factor productivity analysis highlights that during the crisis, in particular between 2007 and 2009, unless Britain, in all countries the small banks show a better cost performance than the larger ones. In general, the authors find a moderate efficiency convergence between countries and between large and small banking groups. As regards the determinants of banking groups efficiency, we find that more liquid, less capitalized banking groups and those more oriented towards the traditional activity of lending are more efficient.

Practical implications

The authors find a positive and high statistically significant relationship between both long- and short-term liquidity degree and the cost efficiency of the banking groups. The policy implication of this result is very significative also in the light of the new banking regulation introduced by Basel III that imposes new rules to strengthen the liquidity risk management.

Social implications

The authors find that the macroeconomic environment variables have some impact on efficiency: the higher the debt and the GDP per capita of the country the lower the bank’s efficiency.

Originality/value

Unlike the most literature on this topic, that usually considers individual banks even if they belong to the same financial conglomerate, the authors analyse only banking groups. In particular, the authors consider all banking groups belonging to the most industrialized European countries in a context of financial crisis and cross-border aggregation movements. Furhermore the authors compare cross-country cost performance of small and large groups, considering the loan loss provisions as an additional input in order to correct the efficiency score for credit risk.

Details

Managerial Finance, vol. 41 no. 7
Type: Research Article
ISSN: 0307-4358

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Book part
Publication date: 10 November 2014

Vincenzo Carrieri, Cinzia Di Novi, Rowena Jacobs and Silvana Robone

This paper investigates the influences of temporary contracts along several dimensions of well-being (physical and mental health, self-assessed health and happiness) for young…

Abstract

This paper investigates the influences of temporary contracts along several dimensions of well-being (physical and mental health, self-assessed health and happiness) for young Italian workers. Our paper contributes to the literature exploring some new aspects of the relationship between temporary jobs and well-being in a country not frequently analysed in previous literature. We focus on the gender gap in the well-being consequences of non-permanent jobs, the influence of financial support by family in reducing well-being effects caused by temporary contracts and the interaction between gender gap and family support. We find that temporary contracts are damaging in terms of psychological health and happiness mostly for young men and individuals without family economic support. On the other hand, women’s mental health is not affected by temporary contracts and they are even better off in terms of their mental health and well-being when receiving family economic support.

Details

Factors Affecting Worker Well-being: The Impact of Change in the Labor Market
Type: Book
ISBN: 978-1-78441-150-3

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