This paper evaluates the impact of local market conditions on small mutual-cooperative banks' (BCCs) efficiency over the period 2006-2011. Efficiency is first estimated applying stochastic frontiers and then regressed against individual and environmental factors. The latter are meant to gauge the structure of the provincial banking market, which is the BCC reference market. Results show that BCCs have performed better than other banks in the present crisis, although efficiency has decreased over time. Furthermore, BCC efficiency increases with market concentration and demand density and decreases as the number of bank branches in local markets increases. This holds whatever the frontier (cost or profit). Finally, local development negatively affects (only) cost efficiency, while BCCs generate more profit when systemic credit risk increases.

Bank efficiency and local market conditions: Evidence from Italy

Bonanno, Graziella
2016-01-01

Abstract

This paper evaluates the impact of local market conditions on small mutual-cooperative banks' (BCCs) efficiency over the period 2006-2011. Efficiency is first estimated applying stochastic frontiers and then regressed against individual and environmental factors. The latter are meant to gauge the structure of the provincial banking market, which is the BCC reference market. Results show that BCCs have performed better than other banks in the present crisis, although efficiency has decreased over time. Furthermore, BCC efficiency increases with market concentration and demand density and decreases as the number of bank branches in local markets increases. This holds whatever the frontier (cost or profit). Finally, local development negatively affects (only) cost efficiency, while BCCs generate more profit when systemic credit risk increases.
File in questo prodotto:
Non ci sono file associati a questo prodotto.

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11386/4740616
 Attenzione

Attenzione! I dati visualizzati non sono stati sottoposti a validazione da parte dell'ateneo

Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 20
  • ???jsp.display-item.citation.isi??? 15
social impact