Size, Non-performing Loan, Capital and Productivity Change: Evidence from Indian State-owned Banks
AbstractWhile the relationship between portfolio risk and capital and its interrelationship with operating efficiency has been extensively studied, little work has been forthcoming on the interrelationships among credit risk, capital and productivity change. The paper makes an attempt to examine the same in the Indian context. Using data on state-owned banks (SOBs) for the period 1995-96 through 2000-2001, the paper finds capital, risk and productivity change to be intertwined, with each reinforcing and to a degree, complementing the other. The results imply that inadequately capitalized banks have lower productivity and are subject to a higher degree of regulatory pressure than adequately capitalized ones. Finally, the results lend support, especially for medium-sized banks, to the belief that lowering Government ownership tends to improve productivity.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 17396.
Date of creation: 2006
Date of revision:
Productivity; credit risk; leverage; banking;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gary Gorton & Richard Rosen, .
"Corporate Control, Portfolio Choice, and the Decline of Banking,"
Rodney L. White Center for Financial Research Working Papers
2-93, Wharton School Rodney L. White Center for Financial Research.
- Gorton, Gary & Rosen, Richard, 1995. " Corporate Control, Portfolio Choice, and the Decline of Banking," Journal of Finance, American Finance Association, vol. 50(5), pages 1377-1420, December.
- Gary Gorton & Richard Rosen, 1994. "Corporate Control, Portfolio Choice, and the Decline of Banking," Center for Financial Institutions Working Papers 95-09, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Gary Gorton & Richard Rosen, 1992. "Corporate Control, Portfolio Choice, and the Decline of Banking," NBER Working Papers 4247, National Bureau of Economic Research, Inc.
- Gary Gorton & Richard Rosen, . "Corporate Control, Portfolio Choice, and the Decline of Banking," Rodney L. White Center for Financial Research Working Papers 02-93, Wharton School Rodney L. White Center for Financial Research.
- Gary Gorton & Richard Rosen, 1992. "Corporate control, portfolio choice, and the decline of banking," Finance and Economics Discussion Series 215, Board of Governors of the Federal Reserve System (U.S.).
- Gilbert, R. Alton & Wilson, Paul W., 1998. "Effects of Deregulation on the Productivity of Korean Banks," Journal of Economics and Business, Elsevier, vol. 50(2), pages 133-155, March.
- Leightner, Jonathan E. & Lovell, C. A. Knox, 1998. "The Impact of Financial Liberalization on the Performance of Thai Banks," Journal of Economics and Business, Elsevier, vol. 50(2), pages 115-131, March.
- Jacques, Kevin & Nigro, Peter, 1997. "Risk-based capital, portfolio risk, and bank capital: A simultaneous equations approach," Journal of Economics and Business, Elsevier, vol. 49(6), pages 533-547.
- Shrieves, Ronald E. & Dahl, Drew, 1992. "The relationship between risk and capital in commercial banks," Journal of Banking & Finance, Elsevier, vol. 16(2), pages 439-457, April.
- Das, Abhiman & Ghosh, Saibal, 2004. "Risk, capital and operating efficiency: Evidence from Indian public sector banks," MPRA Paper 17399, University Library of Munich, Germany.
- Saibal Ghosh, 2005. "Does leverage influence banks' non-performing loans? Evidence from India," Applied Economics Letters, Taylor & Francis Journals, vol. 12(15), pages 913-918.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.