IDEAS home Printed from https://ideas.repec.org/a/fan/steste/vhtml10.3280-ste2007-091003.html
   My bibliography  Save this article

Management quality and risk preference as determinants of efficiency in the italian banking system

Author

Listed:
  • Luca Giordano
  • Antonio Lopes

Abstract

Management Quality and Risk Preference as Determinants of Efficiency in the Italian Banking System (by Luca Giordano, Antonio Lopes) - ABSTRACT: Italian banks are characterized by deep efficiency inequality across size, location, Cooperative Credit Banks, and Limited Companies. Moreover, non-performing loans are higher in the South than elsewhere. In view of these evidences we asked: is the efficiency gap of the southern banks (and therefore their lower screening and monitoring ability) the primary source of their higher level of bad loans? Or is the poorer quality of the southern bank loans (due to the adverse macroeconomic environment) that causes lower efficiency? As a second point to investigate, we recognize that banks have different risk aversion, which affects the choice of input vector, and we expressly take into account the capitalization degree (as a buffer against the risk) in estimating the bank cost and profit stochastic frontier. The results of the analysis, based on the stochastic frontier models, provide evidence in favour of the endogeneity theory of non-performing loans. Keywords: Bank Efficiency, Stochastic Frontiers, Italian Banks

Suggested Citation

  • Luca Giordano & Antonio Lopes, 2007. "Management quality and risk preference as determinants of efficiency in the italian banking system," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2007(91), pages 55-73.
  • Handle: RePEc:fan:steste:v:html10.3280/ste2007-091003
    as

    Download full text from publisher

    File URL: http://www.francoangeli.it/riviste/Scheda_Rivista.aspx?IDArticolo=32327&Tipo=ArticoloPDF
    Download Restriction: Single articles can be downloaded buying download credits, for info: http://www.francoangeli.it/riviste/inglese_download_credit.asp

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fan:steste:v:html10.3280/ste2007-091003. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Angelo Ventriglia). General contact details of provider: http://www.francoangeli.it/riviste/sommario.asp?IDRivista=59 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.