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Managers and efficiency in banking

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  • Kauko, Karlo

    ()
    (Bank of Finland Research)

Abstract

This paper presents evidence on the impact of managers on cost efficiency in banking. Stochastic frontier analysis is applied to a unique Finnish data set. The paper finds that manager age and education have strong yet complicated effects. University education enhances efficiency if the manager is running a large bank. Managing director changes are systematically followed by efficiency changes. Manager retirement typically causes an efficiency improvement, whereas other manager changes can either improve or weaken efficiency.

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File URL: http://www.suomenpankki.fi/en/julkaisut/tutkimukset/keskustelualoitteet/Documents/0711netti.pdf
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Bibliographic Info

Paper provided by Bank of Finland in its series Research Discussion Papers with number 11/2007.

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Length: 34 pages
Date of creation: 18 Sep 2007
Date of revision:
Handle: RePEc:hhs:bofrdp:2007_011

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Postal: Bank of Finland, P.O. Box 160, FI-00101 Helsinki, Finland
Web page: http://www.suomenpankki.fi/en/
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Keywords: efficiency; banking; managers;

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References

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Citations

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Cited by:
  1. Koetter, Michael & Poghosyan, Tigran, 2009. "The identification of technology regimes in banking: Implications for the market power-fragility nexus," Journal of Banking & Finance, Elsevier, vol. 33(8), pages 1413-1422, August.
  2. Liao, Hsien-Hsing & Chen, Tsung-Kang & Lu, Chia-Wu, 2009. "Bank credit risk and structural credit models: Agency and information asymmetry perspectives," Journal of Banking & Finance, Elsevier, vol. 33(8), pages 1520-1530, August.
  3. O. De Jonghe & M. Disli & K. Schoors, 2011. "Corporate governance, opaque bank activities, and risk/return efficiency: Pre- and post-crisis evidence from Turkey," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 11/729, Ghent University, Faculty of Economics and Business Administration.
  4. George Assaf, A. & Matousek, Roman & Tsionas, Efthymios G., 2013. "Turkish bank efficiency: Bayesian estimation with undesirable outputs," Journal of Banking & Finance, Elsevier, vol. 37(2), pages 506-517.
  5. Ruey-Ching Hwang & Jhao-Siang Siao & Huimin Chung & C. Chu, 2011. "Assessing bankruptcy prediction models via information content of technical inefficiency," Journal of Productivity Analysis, Springer, vol. 36(3), pages 263-273, December.
  6. Kontolaimou, Alexandra & Tsekouras, Kostas, 2010. "Are cooperatives the weakest link in European banking? A non-parametric metafrontier approach," Journal of Banking & Finance, Elsevier, vol. 34(8), pages 1946-1957, August.
  7. Guohua Feng & Apostolos Serletis, 2009. "Efficiency, Technical Change, and Returns to Scale in Large U.S. Banks: Panel Data Evidence from an Output Distance Function Satisfying Theoretical Regularity," Monash Econometrics and Business Statistics Working Papers 5/09, Monash University, Department of Econometrics and Business Statistics.
  8. Drake, Leigh & Fleissig, Adrian R., 2010. "Substitution between monetary assets and consumer goods: New evidence on the monetary transmission mechanism," Journal of Banking & Finance, Elsevier, vol. 34(11), pages 2811-2821, November.
  9. Dong Xiang & Abul Shamsuddin & Andrew C Worthington, 2011. "A comparative technical, cost and profit efficiency analysis of Australian, Canadian and UK banks: Feasible efficiency improvements in the context of controllable and uncontrollable factors," Discussion Papers in Finance finance:201119, Griffith University, Department of Accounting, Finance and Economics.

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