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The impact of soft information and institutional quality on foreign bank efficiency – Evidence from ASEAN-5 countries

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  • Chan, Sok-Gee
  • Aktan, Bora
  • Burton, Bruce
  • Koh, Eric H.Y.

Abstract

This paper provides evidence regarding the impact of soft information on foreign bank efficiency in the ASEAN-5 market in the years following the Asian crisis. The analysis presented here develops previous literature by disaggregating soft information into five difference types and examining whether institutional quality (proxied for by host-country economic risk stability index) mitigates the impact. Using a three-stage estimation process we find that soft information does indeed affect foreign banks’ efficiencies in an identifiable manner, but host-country institutional quality acts so as to significantly lessen the effect.

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  • Chan, Sok-Gee & Aktan, Bora & Burton, Bruce & Koh, Eric H.Y., 2021. "The impact of soft information and institutional quality on foreign bank efficiency – Evidence from ASEAN-5 countries," International Review of Economics & Finance, Elsevier, vol. 74(C), pages 23-32.
    • Handle: RePEc:eee:reveco:v:74:y:2021:i:c:p:23-32
    DOI: 10.1016/j.iref.2021.01.017
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    More about this item

    Keywords

    Foreign bank efficiency; Soft information; Institutional quality; ASEAN-5; Data envelopment analysis; Generalized method of moments;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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