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The European consumer credit industry: determinants of performance

Author

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  • Luisa Anderloni
  • Alessandra Tanda
  • Daniela Vandone

Abstract

Despite the relevance gained by the consumer credit industry since the 2000s and its importance in supporting the financial needs of households, there is very little evidence on how this industry has performed over the years. This paper fills a gap in the literature by providing updated evidence through a dynamic generalised method of moments (GMM) estimation of the determinants of performance, measured as profitability and as cost efficiency, in a sample of European consumer credit companies over the period 2005-2014. Results show that both firm-specific and market-specific features influence the performance. Among these, larger size contributes to enhanced performance, while credit risk has a strong deleterious effect. The negative effect prevails also for the market household debt. On the contrary, credit diffusion has a positive impact both on profitability and efficiency.

Suggested Citation

  • Luisa Anderloni & Alessandra Tanda & Daniela Vandone, 2018. "The European consumer credit industry: determinants of performance," International Journal of Accounting and Finance, Inderscience Enterprises Ltd, vol. 8(2), pages 181-193.
    • Handle: RePEc:ids:intjaf:v:8:y:2018:i:2:p:181-193
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    Cited by:

    1. Massimiliano Affinito & Federica Sabbi & Raffaele Santioni & Francesco Santorelli, 2024. "Types of consumer credit and bank distribution channels: insights from Italy," Questioni di Economia e Finanza (Occasional Papers) 879, Bank of Italy, Economic Research and International Relations Area.

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