Cooperative bank efficiency in Japan: a parametric distance function analysis

J. Colin Glass, Donal G. McKillop, Barry Quinn, John O.S. Wilson

Research output: Contribution to journalArticle

22 Citations (Scopus)

Abstract

This study examines the relative performance of Japanese cooperative banks between 1998 and 2009, explicitly modeling non-performing loans as an undesirable output. Three key findings emerge. First, the sector is characterized by increasing returns to scale which supports the ongoing amalgamation process within the sector. Second, although restricted in product offerings, markets and their membership base, Japanese cooperatives secured both technical progress (a positive shift in the frontier) and a decrease in technical inefficiency (distance from the frontier). Third, the analysis highlighted that regulatory pressure to reduce non-performing loans will have an adverse impact on both output and performance. 
Original languageEnglish
Pages (from-to)291-317
Number of pages27
JournalEuropean Journal of Finance
Volume20
Issue number3
Early online date30 Jul 2012
DOIs
Publication statusPublished - 2014

Keywords

  • Japanese cooperative banks
  • efficiency
  • regulatory compliance

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)

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