Do government owned banks trade market power for slack?
| Autor: | O. Vins, Andreas Hackethal, Michael Koetter |
|---|---|
| Přispěvatelé: | Research programme GEM |
| Jazyk: | angličtina |
| Rok vydání: | 2012 |
| Předmět: |
Consumption (economics)
Finance OWNERSHIP Economics and Econometrics EFFICIENCY Cost efficiency QUIET LIFE business.industry Profit maximization COST savings banks COMPETITION Per capita income INDUSTRY QUANTILE ESTIMATION Competition (economics) Economics Revenue Market power quiet life hypothesis FINANCIAL SECTOR DEREGULATION business Profit efficiency |
| Zdroj: | Applied Economics, 44(33), 4275-4290. ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD |
| ISSN: | 0003-6846 |
| DOI: | 10.1080/00036846.2011.589808 |
| Popis: | The 'Quiet Life Hypothesis (QLH)' posits that banks with market power have less incentives to maximize revenues and minimize cost. Especially government owned banks with a public mandate precluding profit maximization might succumb to a quiet life. We use a unified approach that simultaneously measures market power and efficiency to test the quiet life hypothesis of German savings banks. We find that average local market power declined between 1996 and 2006. Cost and profit efficiency remained constant. Nonparametric correlations are consistent with a quiet life regarding cost efficiency but not regarding profit efficiency. The quiet life on the cost side is negatively correlated with bank size, quality of loan portfolio and local per capita income. The last result indicates that the quiet cost life is therefore potentially due to benevolent excess consumption of local input factors by public savings banks. |
| Databáze: | OpenAIRE |
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