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Strategic Management of Cost Efficiencies in Networks: Cross-country Evidence on European Branch Banking

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  • Nayantara D. Hensel

Abstract

This paper examines the role of cost efficiencies on efficient management of branch networks in the contemporary European commercial banking industry. The analysis, which could be generalised to other industries, indicates that larger banks are more likely to have heavily utilised branch networks than smaller banks and to exhibit fewer cost efficiencies from building more branches. The finding of this result within each country suggests the role of internal firm size regardless of competitive conditions. The similar cross-country finding suggests the impact of factors such as market structure/concentration levels and type of non-price competition. Larger banks can generate less income per unit asset deployed. Cross-border efficiency might be improved by greater use of banks with under-used networks by banks with over-used networks. Copyright Blackwell Publishing Ltd 2003.

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  • Nayantara D. Hensel, 2003. "Strategic Management of Cost Efficiencies in Networks: Cross-country Evidence on European Branch Banking," European Financial Management, European Financial Management Association, vol. 9(3), pages 333-360.
  • Handle: RePEc:bla:eufman:v:9:y:2003:i:3:p:333-360
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    Cited by:

    1. Hirtle, Beverly, 2007. "The impact of network size on bank branch performance," Journal of Banking & Finance, Elsevier, vol. 31(12), pages 3782-3805, December.
    2. Paradi, Joseph C. & Zhu, Haiyan, 2013. "A survey on bank branch efficiency and performance research with data envelopment analysis," Omega, Elsevier, vol. 41(1), pages 61-79.
    3. Richard Simper & Maximilian J.B. Hall & Wenbin B. Liu & Valentin Zelenyuk & Zhongbao Zhou, 2014. "How Relevant is the Choice of Risk Management Control Variable to Non-parametric Bank Profit Efficiency Analysis?," CEPA Working Papers Series WP122014, School of Economics, University of Queensland, Australia.
    4. Paradi, Joseph C. & Rouatt, Stephen & Zhu, Haiyan, 2011. "Two-stage evaluation of bank branch efficiency using data envelopment analysis," Omega, Elsevier, vol. 39(1), pages 99-109, January.
    5. repec:eee:ejores:v:266:y:2018:i:2:p:746-760 is not listed on IDEAS

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