Rethinking bank business models: the role of intangibles

<p>Purpose: This paper provides a new way of rethinking banking models by using qualitative research on intangibles. This is required because the banking sector has been transformed significantly by the changing environment over the past two decades. The 2007-2009 financial crisis also added to concerns about existing bank business models.</p> <p>Design/Methodology approach: Using qualitative data collected from interviews with bank managers and analysts in the UK, this paper develops a grounded theory of bank intangibles.</p> <p>Findings: The model reveals how intangibles and tangible/financial resources interact in the bank value creation process, how they actively respond to environmental changes, how bank intangibles are understood by external observers such as analysts, and how bankers and analysts differ in their views.</p> <p>Research implications: Grounded theory provides the means to further develop bank models as business models and theoretical models. This provides the means to think beyond conventional finance constructs and to relate bank models to a wider theoretical literature concerning intellectual capital, organisational and social systems theory, and ‘performativity’.</p> <p>Practical implications: Such development of bank models and of a systems perspective is critical to the understanding of banks by bankers, by observers and for their ‘critical and reflexive performativity’. It also has implications for systemic risk and bank regulation.</p> <p>Social implications: Improvement in bank models and their use in open and transparent processes are key means to improve public accountability of banks.</p> <p>Originality: The paper reveals the core role of intellectual capital (IC) in banks, in markets, and in developing theory and research at firm and system levels. </p&gt

The Politics of Fragmentation in an Age of Scarcity: A Synthetic View and Critical Analysis of Welfare State Crisis

A general perception of crisis at the end of the postwar period of growth has spawned two types of theoretical response: while a conservative theory of overload focusses on ungovernability caused by postmaterialist value change, radical analysis points to the structural contradictions of the welfare and intervention state. This article suggests that the current crisis is characterized by postmaterialist persistence and structural contradictions under the conditions of economic constraint. It examines polarization and potential mobilization of fragmented postindustrial societies in the context of neo-conservative politics, and it suggests a regime of economic dualism and/or corporatism as the most likely outcome

Exploring the Conduct of Ethiopian Banks: The Structure- Conduct-Performance Approach

The study uses the views from both bank mangers and regulatory staff to investigate the behavior of banks operating in a concentrated market. As identified in the literature, such variables as bank conduct, has been a neglected topic in the traditional SCP hypothesis. This is due to the claim that bank conduct is a derivative of the industry structure on the one hand and the difficult to quantitatively test the behavior of banks in the system as the proxy variables are not quantitative by nature or else data is not available as they are not represented in the financial records of banks. The study however finds that bank conduct is not necessarily a derivate of the industry structure. Such findings from the qualitative approach witnessed a different behavior of banks than the one suggested in the SCP hypotheses. For instance, given high market concentration, banks in Ethiopia are behaving differently in price competition which remains a less essential parameter to change performances. Service difference has been an important reaction taken by the banks. Banks have been promoting themselves through a mix of approaches and attempted to increase their market share via increasing branch networks. In addition, besides market structure, regulation has been the most important variable affecting banks performance via encouraging homogenous service offerings, similar bank growth strategies and controlling their asset quality positions. Unlike what is claimed in the SCP hypothesis, the qualitative study shows that organic growth, not merger and acquisition, is considered as a dominant strategy that ensure growth in the banking system. Bank risk taking behavior also appears in contrast to the hypotheses as banks behavior towards risk is guided by the development status in the financial market as well as the competition level in alternative markets like foreign banking. The quiet life test result is also unlike the one suggested by the SCP hypotheses as banks are found to be conscious in their expense management decision. The qualitative study also explored additional variables determining bank conduct such as employee retention, top management reputation and quality of relationship with shareholders. DOI: 10.7176/EJBM/11-1-09

China's Township and Village Enterprises and their Evolving Business Alliances and Organizational Change.

The economic literature suggests that the success of China's WEs has arisen due to special circumstances. This paper argues, to the contrary, that they are likely to remain a significant feature of the Chinese economy, albeit in new organisational and ownership forms, for some time. Their evolving strategic business alliances, including that with science based research institutions, it is argued, will make this possible.OWNERSHIP ; BUSINESS ORGANIZATION ; ECONOMIC GROWTH

New frontiers in international strategy

This paper is based on a panel we organized at the "First Annual Conference on Emerging Research Frontiers in International Business Studies", organized by the Journal of International Business Studies (JIBS), to discuss several new lines of research in international strategy. Four lines of research are developed: The strategic implications of semiglobalization, the impact of institutional voids in international strategy, primitives and levels of analysis in international business, and strategies for the base of the pyramid. Taken together, these studies aim to open a new frontier in our understanding of International Strategy, based on the co-location of firms as places and a key element in international business.international business; semiglobalization; internal strategy; base pyramid; institutions; competitiveness;

Should and can labour-surplus, middle-income economies pursue labour-intensive growth? The South African Challenge

South Africa's industrial policy rests on Michael Porter's logic of raising productivity to promote dynamic competitive advantage. Given high unemployment, however, a more Arthur Lewis-like emphasis on labour-intensive development is also appropriate. Contrary to conventional wisdom, evidence from sectors such as clothing shows that South African producers remain sufficiently competitive as long as minimum wages are not raised in pursuit of a Porterian strategy. The South African case suggests that it is both desirable and feasible for an industrialised labour-surplus, middle-income economy like South Africa to pursue a mix of strategies including the promotion rather than destruction of labour-intensive jobs

Performance determinants of local currency bond markets in African emerging economies

Submitted in accordance with the requirement for the degree of Doctor of Philosophy In Business Administration At the University of the Witwatersrand JohannesburgGenerating sufficient domestic revenues to finance economic growth has been a critical hurdle for many African countries and, for decades, foreign capital has complemented domestically generated resources to finance growth. However, global financial crises over the past few decades tend to curtail, if not dry up the flow of capital to African governments. The unreliability of foreign capital with its attendant strings and sudden stops in the event of economic and political crisis has spurred the need for alternative sources of financing development. Despite the realisation that bond markets provide a viable source of funds for the African continent, the literature on the importance of bond market development and its interaction with other sources of funding remains underexplored. Moreover, the sparse empirical literature about bond market development in Africa is vague and largely overlooked. At the same time, knowledge of African bond markets is vital for channelling funds not only to efficient agents in particular, but also for fostering transparency and the flow of information within the continent’s capital markets. This thesis endeavours to address the vacuum apparent in extant literature and proposes a theoretical framework through a thorough assessment of the determinants of bond market development in African emerging market economies. The thesis examines four critical pillars of bond market development: (a) the environment for the creation of bond markets; (b) the relative performance and characteristics of bond markets across and within developing and developed economies; (c) the modelling of bond markets and (c) the institutional factors that underpin the efficient functioning of bond markets. Using macroeconomic, social, institutional and historical data on local currency bond markets from 26 African economies and 49 listed firms, this thesis extends previous studies on bond market determinants through tighter robustness measures by accounting for downside risk in a generalized methods of moments (GMM) and a feasible generalized least squares estimator (FGLSE) framework. Further, differential analysis of government and corporate bond markets are carried out, given their different investment horizons and issuance. The results suggest that from a macroeconomic perspective, inflation, central government debt, GDP, external debt, GDP per capita and fiscal balance are important drivers of local currency bond market development in African economies. Moreover, political unrest, governance, religion, former colonial ties and culture are institutional factors that exert statistically significant effects on local currency bond market performance in Africa. From a demand viewpoint, the study finds that firm level factors that influence bond market performance are firm risk, size, profitability and age. The results from this study are of importance to capital market participants, investors, regulators and policy makers who seek to address the perennial constraints to development occasioned by lack of capital. A number of policy measures for boosting bond market performance such as stable macroeconomic environments, reform of capital market rules and cross listing are discussed in the final chapter. JEL CLASSIFICATION: International Economics; Financial Economics; Economic Development; Innovation; Technological Change; and Growth. KEYWORDS: Africa; Emerging economy; Bond market; Institutions; Local Currency Bond Market; Performance; Development.GR201

Banking structure and governance: changes in regulation and technology

This thesis is concerned with the banking structure and its governance when the industrial policy and the banking technology change over time. The first part of the thesis briefly reviews the East Asian banking structure and its changes during the industrialisation. In chapter 2, we investigate the impact of industrial policy on banking behaviour and on the overall banking structure. We argue that the transition from a price-cap regulation (interest rate control) to a rate-of-return regulation (ROA and/or BIS ratio) induces a more concentrated banking structure as banking behaviour shifts from revenue maximising to profit maximising. Empirical evidence from Japan and Korea supports the argument. In chapter 3, we examine the behaviour of banks and customers when a new banking technology is introduced. The determinants of consumer adoption of internet banking are identified using survey data from Korea. Empirical issues of banking technology concerning customer inertia, risk aversion and pre-emption are assessed. During analysis finds no evidence of first mover advantage in internet banking, whilst the largest bank in commercial banking is dominant in internet banking. In chapter 4, we introduce ‘collective relationship banking’ as a new concept of banking to link the real and the banking sector structures. We analyse the choice between collective relationship banking and independent banking in addition to the switching between the two banking relationships using a case study. Changes in the corporate ownership structure appear to influence the banking relationship as well as its switching

Comparative analysis of competitiveness and knowledge-technological network in two shrimp producing groups in Mexico

This study is to compare the knowledge-technological flow networks to the competitiveness in two shrimp producing groups from the municipality of Ahome (Sinaloa). It has focused on an analysis of social networks and the information was obtained by the application of a survey to asample of 60 shrimp producing companies (7 belongs to Sinaloa Aquaculture Cluster and the 53 left belong to the social and private sector). It was found that in the Sinaloa Aquaculture Cluster the network indicators and the competitiveness scale were higher than the rest of the farms. Thismeans that there is a greater transfer of information between the actors, and they also play a key role within the structure, as well as the limited size of the population in the organizations that make up the cluster shrimp farming as well as being focused on geographic and sectorial ambits. For that,is not possible to assume a causal relation and generalize the findings neither. Unity and strategic organization are key factors for this type of productive articulations, as they constitute an important source of social welfare and have a favorable impact on regional development.Con este estudio, se busca comparar las redes de flujo de conocimiento sobre tecnología en relación con la competitividad a partir de dos grupos productores de camarón en el municipio de Ahome (Sinaloa). Está enfocado en un análisis de las redes sociales, y la información se obtuvo a través de una encuesta, con una muestra de 60 empresas productoras de camarón (7 pertenecen al Clúster Sinaloa-Acuícola y las 53 restantes pertenecen al sector social y privado). Se encontró que,en Clúster Sinaloa-Acuícola, los indicadores de la red y la escala de competitividad fueron superiores al resto de las granjas. Esto significa que existe una mayor transferencia de información entre losactores, y también desempeñan un papel clave dentro de la estructura, así como el tamaño limitado de la población en las organizaciones que conforman el clúster camaronero, además de estar enfocados en ámbitos geográficos y sectoriales. Por eso, tampoco es posible asumir una relación causal y generalizar los hallazgos. La unidad y la organización estratégica son factores clave para este tipo de articulaciones productivas, ya que constituyen una importante fuente de bienestar social y tienen un impacto favorable en el desarrollo regional