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Level and Determinants of Foreign Bank Efficiency in a Pacific Island Country

Author

Listed:
  • Parmendra Sharma

    (Department of Accounting Finance and Economics, Griffith Asia Institute, Griffith University, Queensland, Australia)

  • Neelesh Gounder

    (School of Economics, Faculty of Business and Economics, University of the South Pacific, Suva, Fiji)

  • Dong Xiang

    (International Institute for Financial Studies, Jiangxi University of Finance and Economics, P. R. China)

Abstract

This study fills a huge gap in literature by providing some evidence on the level and determinants of bank efficiency in a Pacific island context. DEA results show that overall efficiency levels may be lower than in Australia, the home country of major banks. Dynamic GMM and panel data results show that personnel expenses and bank credit matter for efficiency, but not other bank-specific and macroeconomic factors. These insights substantially improve policy-making capacities for Fiji and other Pacific economies, including Papua New Guinea, Samoa, Tonga, Solomon Islands and Vanuatu where banking and regulatory systems and structures are highly comparable.

Suggested Citation

  • Parmendra Sharma & Neelesh Gounder & Dong Xiang, 2015. "Level and Determinants of Foreign Bank Efficiency in a Pacific Island Country," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 18(01), pages 1-26.
    • Handle: RePEc:wsi:rpbfmp:v:18:y:2015:i:01:n:s0219091515500058
    DOI: 10.1142/S0219091515500058
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    Citations

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    Cited by:

    1. Salah Mohammed Abdulahi & Mekonnen Kumlachew Yitayaw & Habtamu Legese Feyisa & Wondmagegn Biru Mamo, 2023. "Factor affecting technical efficiency of the banking sector: Evidence from Ethiopia," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(1), pages 2186039-218, December.
    2. Samuel Fosu & Albert Danso & Henry Agyei-Boapeah & Collins G. Ntim & Emmanuel Adegbite, 2020. "Credit information sharing and loan default in developing countries: the moderating effect of banking market concentration and national governance quality," Review of Quantitative Finance and Accounting, Springer, vol. 55(1), pages 55-103, July.
    3. Anachit Bagntasarian & Emmanuel Mamatzakis, 2019. "Testing for the underlying dynamics of bank capital buffer and performance nexus," Review of Quantitative Finance and Accounting, Springer, vol. 52(2), pages 347-380, February.
    4. Mamatzakis, Emmanuel & Bagntasarian, Anna, 2019. "The nexus between underlying dynamics of bank capital buffer and performance," MPRA Paper 92961, University Library of Munich, Germany.
    5. Sayyed Mahdi Ziaei, 2017. "Effects of Financial Soundness and Openness on Financial Development," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 20(04), pages 1-14, December.
    6. Proença, Catarina & Augusto, Mário & Murteira, José, 2023. "The effect of earnings management on bank efficiency: Evidence from ECB-supervised banks," Finance Research Letters, Elsevier, vol. 51(C).

    More about this item

    Keywords

    Bank efficiency; DEA; dynamic GMM; Pacific Island countries; Fiji; C67; G21;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

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