Chronopoulos, Dimitris K and Girardone, Claudia and Nankervis, John C (2011) Are there any cost and profit efficiency gains in financial conglomeration? Evidence from the accession countries. The European Journal of Finance, 17 (8). pp. 603-621. DOI https://doi.org/10.1080/1351847x.2010.538300
Chronopoulos, Dimitris K and Girardone, Claudia and Nankervis, John C (2011) Are there any cost and profit efficiency gains in financial conglomeration? Evidence from the accession countries. The European Journal of Finance, 17 (8). pp. 603-621. DOI https://doi.org/10.1080/1351847x.2010.538300
Chronopoulos, Dimitris K and Girardone, Claudia and Nankervis, John C (2011) Are there any cost and profit efficiency gains in financial conglomeration? Evidence from the accession countries. The European Journal of Finance, 17 (8). pp. 603-621. DOI https://doi.org/10.1080/1351847x.2010.538300
Abstract
Diversified banks should benefit from an efficient allocation of resources, debt coinsurance and scope economies. At the same time, critics of diversification question these advantages pointing to agency problems such as managerial entrenchment and empire building that could also lead to diversification but for the 'wrong' reasons. This paper sheds further light on the issue of bank diversification by taking a direct look into how efficiently financial conglomerates operate and by measuring to what extent size and other bankand market-specific factors matter in evaluating the relationship between diversification and efficiency. We focus on banks operating in the accession countries over the period 2001-2007 and estimate their cost and alternative profit efficiencies using a data envelopment analysis estimator. The results indicate that banks suffer from relatively high cost and profit inefficiencies and that there are noticeable differences in the efficiency levels across countries. Concerning banks' degree of diversification, we find strong evidence to suggest that more diversified institutions are more likely to be cost- and profit-efficient and that size is a key factor in explaining best practice, particularly on the profit side. © 2011 Taylor & Francis.
Item Type: | Article |
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Uncontrolled Keywords: | financial conglomerates; efficiency; accession countries; DEA; two-stage approach |
Subjects: | H Social Sciences > HG Finance |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Essex Business School |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 18 Nov 2011 14:43 |
Last Modified: | 30 Oct 2024 19:49 |
URI: | http://repository.essex.ac.uk/id/eprint/1525 |