EconPapers    
Economics at your fingertips  
 

Bank opacity, intermediation cost and globalization: Evidence from a sample of publicly traded banks in Asia

Wahyoe Soedarmono and Amine Tarazi

Journal of Asian Economics, 2013, vol. 29, issue C, 91-100

Abstract: This paper examines the relationship between opacity and the cost of intermediation in Asian banks. Using a sample of publicly traded commercial banks from 2002 to 2008, our empirical results show that higher opacity is associated with a lower intermediation cost in banking. Hence, bank managers in their efforts to overcome asymmetric information issues and to improve transparency tend to offset the higher cost of acquiring and disclosing information by increasing the cost of intermediation for entrepreneurs. Moreover, a deeper look at the country level indicates that the negative link between opacity and the cost of intermediation is reversed as globalization increases. Greater globalization therefore outweighs managerial entrenchment behavior to preserve bank opacity. Our findings highlight that bank opacity issues are even more costly in countries with higher globalization.

Keywords: Bank opacity; Financial intermediation; Globalization; Asia (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1049007813001012
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Bank opacity, intermediation cost and globalization: Evidence from a sample of publicly-traded banks in Asia (2013)
Working Paper: Bank opacity, intermediation cost and globalization: Evidence from a sample of publicly traded banks in Asia (2013) Downloads
Working Paper: Bank Opacity, Intermediation Cost and Globalization: Evidence from a Sample of Publicly Traded Banks in Asia (2013) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:29:y:2013:i:c:p:91-100

Access Statistics for this article

Journal of Asian Economics is currently edited by C. Wiemer

More articles in Journal of Asian Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-06-07
Handle: RePEc:eee:asieco:v:29:y:2013:i:c:p:91-100