 Risk-adjusted efficiency and innovation: an examination of systematic difference and convergence among BRIC banksThanh Nguyen, Son Nghiem and Abhishek Singh Bhati Economic Systems, 2024, vol. 48, issue 1 Abstract: We argue that technological progress and technology diffusion is improving innovation the banking industry, leading to a potential steady-state equilibrium in operational efficiency and innovation across banks with similar characteristics. Using the latest meta-frontier method, this study examined BRIC banks during the period from 2000 to 2020. We found that Indian and Brazilian banks are more innovative in reducing costs, whereas Indian and Chinese banks are more cost efficient. Chinese, Russian, Indian, and Brazilian banks rank first to fourth in profit efficiency and profit-making innovation, respectively. Risk-taking boosts group cost and profit efficiencies and profit-making innovation but reduces cost-reducing innovation in each country. BRIC banks diverged in innovation during the analysis period but slowly converged after the 2008 crisis. Reform policies, adoption of production technology, formulating regulations and investing in human capital and technologies are crucial for less efficient and innovative banks to catch-up with frontier banks. Keywords: Efficiency; Innovation, Risk; Convergence; BRIC (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:48:y:2024:i:1:s0939362523001061 DOI: 10.1016/j.ecosys.2023.101167 Access Statistics for this article Economic Systems is currently edited by R. Frensch More articles in Economic Systems from Elsevier Contact information at EDIRC. |
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