Economics at your fingertips  

Clicks business of deposit-taking institutions: an efficiency analysis

Farkhanda Shamim, Nobuyoshi Yamori () and Shahid Anjum

Journal of Economic Studies, 2017, vol. 44, issue 6, 911-930

Abstract: Purpose - The purpose of this paper is to empirically examine the direct and indirect effects of automated teller machines (ATMs) on the performance and scope economies of the Japanese financial institutions. Design/methodology/approach - Stochastic frontier approach is adopted to estimate banks’ cost and profit efficiency indices and to examine the relationship between inefficiency scores and the number of ATMs. Findings - The study concludes that the banks not only minimize costs and save money by using ATMs, but also spend the saved funds on hiring highly skilled staff to introduce a better product mix which allows the banks to observe scope economies. Originality/value - The findings suggest that although branches would remain a crucial interaction point for relationship banking, but given their high fixed cost, shifting routine banking transactions from the branch to low-cost electronic channels can significantly reduce costs and enhance efficiency of the financial institutions.

Keywords: Stochastic frontier approach; Profit efficiency; Cost efficiency; Automated teller machines; Deposit-taking institutions (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) ... RePEc&WT.mc_id=RePEc (text/html)
Access to full text is restricted to subscribers

Related works:
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:

Ordering information: This journal article can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK

Access Statistics for this article

Journal of Economic Studies is currently edited by Professor Mohsen Bahmani-Oskooee

More articles in Journal of Economic Studies from Emerald Group Publishing
Bibliographic data for series maintained by Virginia Chapman ().

Page updated 2020-06-13
Handle: RePEc:eme:jespps:jes-01-2017-0003