Management quality and risk preference as determinants of efficiency in the italian banking system

Luca Giordano () and Antonio Lopes

STUDI ECONOMICI, 2007, vol. 2007/91, issue 91, 55-73

Abstract: Management Quality and Risk Preference as Determinants of Efficiency in the Italian Banking System (by Luca Giordano, Antonio Lopes) - ABSTRACT: Italian banks are characterized by deep efficiency inequality across size, location, Cooperative Credit Banks, and Limited Companies. Moreover, non-performing loans are higher in the South than elsewhere. In view of these evidences we asked: is the efficiency gap of the southern banks (and therefore their lower screening and monitoring ability) the primary source of their higher level of bad loans? Or is the poorer quality of the southern bank loans (due to the adverse macroeconomic environment) that causes lower efficiency? As a second point to investigate, we recognize that banks have different risk aversion, which affects the choice of input vector, and we expressly take into account the capitalization degree (as a buffer against the risk) in estimating the bank cost and profit stochastic frontier. The results of the analysis, based on the stochastic frontier models, provide evidence in favour of the endogeneity theory of non-performing loans. Keywords: Bank Efficiency, Stochastic Frontiers, Italian Banks

Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.francoangeli.it/riviste/Scheda_Rivista. ... 327&Tipo=ArticoloPDF (text/html)
Single articles can be downloaded buying download credits, for info: https://www.francoangeli.it/DownloadCredit

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: https://EconPapers.repec.org/RePEc:fan:steste:v:html10.3280/ste2007-091003

Ordering information: This journal article can be ordered from
http://www.francoang ... io.aspx?IDRivista=59

Access Statistics for this article

STUDI ECONOMICI is currently edited by FrancoAngeli

More articles in STUDI ECONOMICI from FrancoAngeli Editore
Bibliographic data for series maintained by Stefania Rosato ().