Banking Operational Cost in the Balkan Region under a Quadratic Loss Function
AbstractThis paper presents of theoretical specification of a quadratic loss function based on forward looking rational expectations to model the underlying dynamics of operational performance of the banking industry. As an empirical application we examine the determinants of total operating costs within a dynamic panel analysis in the Balkan region that is the South East Europe (SEE) over the period 1998-2005. Results show that operating performance is positively related to loan quality and the asset size or the bank’s market share, whilst the speed of adjustment to the long run operational cost is substantial in magnitude.
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 24630.
Date of creation: 18 Aug 2010
Date of revision:
Forward looking rational expectations; banking operating costs.;
Other versions of this item:
- E Mamatzakis, 2009. "Banking Operational Cost in the Balkan Region under a Quadratic Loss Function," Economics Bulletin, AccessEcon, vol. 29(2), pages 883-890.
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-11 (All new papers)
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.:
- Huang, Tai-Hsin & Shen, Chung-Hua, 2002. "Seasonal cointegration and cross-equation restrictions on a forward-looking buffer stock model of money demand," Journal of Econometrics, Elsevier, vol. 111(1), pages 11-46, November.
- Akhigbe, Aigbe & McNulty, James E., 2003. "The profit efficiency of small US commercial banks," Journal of Banking & Finance, Elsevier, vol. 27(2), pages 307-325, February.
- Arellano, Manuel & Bond, Stephen, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Wiley Blackwell, vol. 58(2), pages 277-97, April.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- Kwan, Simon H., 2003. "Operating performance of banks among Asian economies: An international and time series comparison," Journal of Banking & Finance, Elsevier, vol. 27(3), pages 471-489, March.
- Altunbas, Yener & Liu, Ming-Hau & Molyneux, Philip & Seth, Rama, 2000. "Efficiency and risk in Japanese banking," Journal of Banking & Finance, Elsevier, vol. 24(10), pages 1605-1628, October.
- Mester, Loretta J., 1996. "A study of bank efficiency taking into account risk-preferences," Journal of Banking & Finance, Elsevier, vol. 20(6), pages 1025-1045, July.
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.