Does Greater Capital Hamper the Cost Efficiency of Banks? A Bi-causal Analysis
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11230%2F16%3A10329368" target="_blank" >RIV/00216208:11230/16:10329368 - isvavai.cz</a>
Result on the web
<a href="http://econpapers.repec.org/RePEc:pal:compes:v:58:y:2016:i:3:d:10.1057_s41294-016-0002-4" target="_blank" >http://econpapers.repec.org/RePEc:pal:compes:v:58:y:2016:i:3:d:10.1057_s41294-016-0002-4</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.1057/s41294-016-0002-4" target="_blank" >10.1057/s41294-016-0002-4</a>
Alternative languages
Result language
angličtina
Original language name
Does Greater Capital Hamper the Cost Efficiency of Banks? A Bi-causal Analysis
Original language description
The aim of our research is to analyze the relation between capital and bank efficiency by considering both directions of the Granger causality for the Czech banking industry. We use an exhaustive dataset of Czech banks from 2002 to 2013. We measure the cost efficiency of banks using stochastic frontier analysis. We perform Granger-causality tests to check the sign and significance of the causal relation between capital and efficiency. We embed Granger-causality estimations in the GMM dynamic panel estimator. We find no relation between capital and efficiency, as neither the effect of capital on efficiency, nor the effect of efficiency on capital is significant. The financial crisis does not influence the relation between capital and efficiency. Our findings suggest that tighter capital requirements like those under Basel III do not affect financial stability through the efficiency channel. Policies favoring capital levels and efficiency of the banking industry can therefore be designed separately.
Czech name
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Czech description
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Classification
Type
J<sub>x</sub> - Unclassified - Peer-reviewed scientific article (Jimp, Jsc and Jost)
CEP classification
AH - Economics
OECD FORD branch
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Result continuities
Project
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Continuities
S - Specificky vyzkum na vysokych skolach
Others
Publication year
2016
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Name of the periodical
Comparative economic studies
ISSN
0888-7233
e-ISSN
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Volume of the periodical
58
Issue of the periodical within the volume
3
Country of publishing house
US - UNITED STATES
Number of pages
21
Pages from-to
409-429
UT code for WoS article
000391066900006
EID of the result in the Scopus database
2-s2.0-85010986729