Income Diversification of Chinese Banks: Performance, Risk and Efficiency

This research contributes to the debate on the effects of diversification in the banking industry, and provides a comprehensive analysis of how the diversification-performance, diversification-risk and diversification-efficiency nexus are affected when banks move into non-traditional businesses. The research first examines to what extent income diversification can affect performance in the Chinese banking industry in terms of profitability. Results showing that in the Chinese banking sector as a whole there exists a diversification discount, suggesting that a shift from traditional banking business to mixed business lines negatively affects bank performance. Following the discussion of profitability, we move the focus to the issue of stability. By adopting the first-differenced GMM estimator for the dynamic threshold panel data model, we get results showing that there exists an inverse U-shaped relation between diversification level and risk in the Chinese banking industry. Income diversification will reduce bank risk only after the bank has passed a certain threshold of income diversification. This pattern of relationship seems to be driven mainly by the learn-by-doing effect and the mitigation of agency problems, which result from the expansion of non-interest activities. Finally, this thesis analyses the efficiency implications of the trend towards greater income diversification. We use a two-step approach by adopting within maximum likelihood estimation (WMLE) and dynamic Tobit model to estimate banks’ efficiency scores and regresses those scores with banks’ diversification indicators. We find that for the overall Chinese banking sector, income diversification has an efficiency-destroying effect. This thesis provides a good reference for bank managers and policy makers to better understand and treat non-interest income in China’s banking market. Our results also have fundamental and useful implications for bank managers and policy authorities seeking to enhance the performance and efficiency of Chinese banks under the condition of maintaining financial stability in Chinese financial system

Sustainability of marketing systems: systeming interpretation of hybrid car manufacturer and consumer communications

The purpose of this qualitative macromarketing investigation is to explore the issue of the sustainability of marketing systems. Drawing on complex systems thinking, an alternative logic of marketing systems and a methodological basis for interpreting communicated meanings are developed. The alternative logic of marketing systems recognises the unity of a difference between a marketing system and its environment. This insight has become a cornerstone for synthesising the systeming methodology. Systeming comprises the philosophy, the model, and the method of interpreting communication-as-self-observation of marketing system agents. Data, communication by hybrid car manufacturers and consumers, were collected from netnographic sources such as corporate websites, reports posted online, weblogs, and consumer forums. The interpretation of these data was accomplished using systeming procedures, e.g. communication analysis, distinction identification, re-entry description, and logical level tracking. The systeming analysis of the hybrid car marketer and consumer communications illustrates that meaning-creation in the system is underpinned by purposeful human behaviour in reducing complexity of marketplace experience into a meaningful pattern, sustainability. Both manufacturers and consumers claim to become sustainable in reference to being unsustainable by creating self-referential differences, operating in different interaction contexts, and expanding meaning paradoxes. The interpretation shows that interactive meaning-creation in the system is inherently contradictory. Manufacturers expand (give a logical form to) contradictions through introducing hierarchical meaning structures, temporality, new functions, and communicative transvection. Consumers deal with the contradictions through enriching co-creation experiences and learning the proper continuation of specific hybrid car driving practices. The significant insight gained from this investigation is that the hybrid car marketing system is not a passive entity; it is the locus of purposefully expanding meanings. Two modes of sustainability with regard to the hybrid car marketing system can be distinguished: the content of communication that denotes enacted meanings of sustainability and the form of communication that indicates how sustainable these sustainability enactments are. The content/form distinction implies that the sustainability of the hybrid car marketing system is a matter of interactive meaning-creation between system agents. The sustainable development process, in at least a mobility domain, is driven by purposeful social interaction rather than static product attributes. This investigation is innovative because it a) offers a conceptualisation of a marketing system as a meaning flow; b) synthesises and compiles a methodology and method for interpreting communication in a marketing system; c) reveals systemic insights into the hybrid car marketing system; d) characterises the sustainability dimension of the hybrid car marketing system; e) explains a conceptual ground for reconciling the marketing system and society; f) provides a general macromarketing perspective to scrutinise recent conceptual developments in the marketing discipline; g) unifies marketing systems thinking with recent advancements in the marketing discipline, such as the service-dominant logic, and consumer culture theory; and, also, h) provides recommendations for a number of micro-managerial situations from a holistic perspective

Geometric control of oscillatory integrals

The aim of this thesis is to provide a geometric control of certain oscillatory integral operators. In particular, if $T$ is an oscillatory Fourier multiplier, a pseudodifferential operator associated to a symbol $\alpha$ $\in$ $S$ $^m$ ${p,o}$ or a Carleson-like operator, we obtain a weighted $L$$^2$ inequality of the type $\int$ |$T$$f$|$^2$w $\leq$ C $\int$ |$f$|$^2$$M$$_T$w Here $C$ is a constant independent of the weight function w, and the operator $M$$_T$, which depends on the corresponding T, has an explicit geometric character. In the case of oscillatory Fourier multipliers and of Carleson-like operators we also determine auxiliary geometric operators $g$1 and $g$2 and establish a $pointwise$ estimate of the type $g$$_1$($T$$f$)(x) $\leq$ C $g$$_2$(f)(x): Finally, we include a careful study of a method developed by Bourgain and Guth in Fourier restriction theory, that allows making progress on the Fourier restriction conjecture from their conjectured multilinear counterparts. Our conjectured progress via multilinear estimates has been recently obtained by Guth

Public sector efficiency of decentralized local government in Indonesia : a political and institutional analysis

This thesis investigates public sector efficiency (PSE) of decentralized local governments in Indonesia. Based on the literature review improved efficiency is considered as the main outcome expected from a decentralized system of public service provision. Hence analysing public sector efficiency provides the de facto measure of the ability of decentralized local government in internalizing the benefits of fiscal and political decentralization. In order to identify the significance of the effect of 2004 electoral contest, the first democratic election in the decentralized Indonesia, efficiency in the public sector is investigated in a period from 2005 to 2008. The 2004 electoral contest is considered as an important phase of democratization and decentralization in Indonesia as it was the first election where voters directly chose leaders at every level of government. Political and institutional features which emerged as a result of the 2004 election were expected to have an impact on a decentralized system of public service provision.This thesis employs a two-stage method. In the first stage, non-parametric data envelopment analysis (DEA) is used to generate the efficiency scores of all local governments. Several outcome indicators in the education and health sectors, infrastructure, poverty mitigation as well as macroeconomic performance are taken as a measure of the flow of services that arise from public spending. Hence, public sector efficiency is defined as the flow of services per unit expenditure.The second stage of the method aims to investigate public sector efficiency against non-discretionary variables involving a measure of fiscal decentralization, political and institutional variables, as well as total factor productivity growth as a control variable. In order to do so, this thesis employs an econometric analysis using fixed effect vector decomposition (FEVD). The FEVD is adopted as the political and institutional variables are characterised as time-invariant variables.In the first stage of the method, the DEA estimate reveals that public sector efficiency scores vary across local governments, corroborating the general pattern of the regional disparity in Indonesia. That is, poorly developed regions have relatively inefficient governments. The DEA calculation locates local governments on Java Island at the frontier indicating that these local governments are benchmarking others. On the other hand, Papua and Papua Barat emerge with the lowest efficiency score over the observation period with a large divergence from the frontier. The results also show that the average and the median efficiency scores are drifting downwards, while the distance from the lowest score to the frontier is increasing. This indicates that the regional disparity in the public sector efficiency was increasing over the observation period.The second stage of the method reveals that the ability of a decentralized local government to generate local own-revenue is significant in improving public sector efficiency. The estimation results show that the degree of fiscal decentralization as measured by the ratio of local own-revenue to total public spending has a significant positive impact on the PSE. However, given that the growth of total factor productivity also has a significant and positive impact on the PSE, the result should be seen as a caution that improved PSE might result from overall total productivity in the economy. A local jurisdiction that has higher total factor productivity will present greater public sector efficiency regardless the degree of fiscal decentralization.The second stage estimate also reveals that the formation of the new government as an outcome of the first electoral democracy in the decentralized Indonesia has nothing to do with the PSE improvement. The lost hegemony of Golkar in the decentralized democratized Indonesia, measured as the ratio of seats held by Golkar to total seats in the local assembly, does not show any significant impact on the PSE. The first electoral democracy might have resulted in a new democratic government in Indonesia; however, the new democratic government might be merely a continuation of an old structure with new rules on the limits of democratization. Accordingly, the new democratic government did not impact on improved efficiency in the public sector.Another significant feature of the formation of the new government in the decentralized democratized Indonesia is the rebirth of politik aliran (political parties rooted to a particular socio-ideology). Politik aliran is represented by Islamic based political parties. These parties held a significant number of seats in the legislative councils. The estimation results reveal a negative association between political Islam and PSE, even when PKB (Nation Awakening Party) and PAN (National Mandatory Party) are included in the measure. Both parties do not set Islam as their platform, but affiliate to NU (Nahdlatul Ulama) and Muhammdiyah, the two largest socio-religious organizations in Indonesia. The result may also stand as a confirmation that patron-client affiliation in Indonesia’s electoral democracy fails to leverage accountability and hence fails to result in improved PSE.The second stage estimate finds evidence that democratic participation did not have an impact on the PSE. This contradicts the general representation claiming that greater democratic participation is associated with better economic performance. The estimates reveal a negative impact of democratic participation on the PSE. In the setting of politik aliran, the coefficient estimate is statistically significant. It implies that while political Islam may have increased electoral participation, the participation has nothing to do with improved PSE. This may not be surprising in the case of electoral democracy in Indonesia where electoral participation is characterised by money politics, patron-client political relationship and unbalanced electoral participation.Many parties flourish in the decentralized democratized Indonesia escalating political fragmentation. Using a Herfindahl-Hirschman index as a measure of the size-political fragmentation this study finds evidence that while citizens may have more options to select parties/politicians to best represent their preferences, higher political fragmentation shows ambiguous impact on PSE.The quality of institutional governance and its impact on PSE is represented by a corruption perception index and an infrastructure perception index. The estimation results reveal evidence that public sector efficiency is positively associated with the infrastructure perception index, but fail to find evidence of an effect for the corruption perception index. This indicates that the outcome of decentralization is not contingent with a perception about corruption as it is prevalent in the decentralized Indonesia. It occurs almost in all levels of government and institutions. Thus if decentralization results in improved efficiency, it is not due to a corruption lessening but rather due to variations in the level of infrastructure

Essays on Finance and Risk

Tato dizertace obsahuje tři kapitoly, ve kterých jsou empiricky zkoumány klasické otázky bankovní rizika a finanční ekonomie. V první kapitole zkoumám jestli bankovní likvidita, kapitál a riziko jsou společně určeny v bankovním sektoru eurozóny. Ve druhé kapitole, spolu s Adamom Geršlem, Petrem Jakubíkem, Stevnem Ongena a José- Luis Peydró, zkoumáme roli měnových podmínek pro bankovní rizika v sektoru v ČR. Používame komplexní úvěrověho registru České národní banky. Třetí kapitola se vztahuje na mod- eloveho rizika a analyzuje výkonnost vybraného modelu vynosove krivky při oceňování úrokové swapy na polském trhu. Cox-Ingersoll-Ross navrhuje ze volatilita souvisi z ve- likosti úrokových sazeb. Ex-post Nelson-Siegel model ukazuje, že prurez výnosove křivky je velmi informativni pro budoucnost.Dorota Kowalczyk: Essays on Finance and Risk Abstract This dissertation consists of three chapters that empirically investigate questions of increasing relevance in the banking risk and financial economics literature. The first chapter studies bank risk in the context of its joint determination with bank liquidity and capital in the Eurozone. The second chapter examines the banks' appetite for risk using the comprehensive credit register of the Czech National Bank. Finally, the last chapter refers to model risk and analyzes the ability of the selected term structure models to value the interest rate swaps in the Polish market. The first chapter analyzes the coordination of bank risk, liquidity and capital in the presence of securitization. Its outcome contributes to the debate on the effectiveness of the banking regulations. My findings with regard to the simultaneity of capital and risk decisions are consistent with previous empirical studies. Incorporation of bank liquidity permits me to establish the presence of the coordination of risk and liquidity decisions. At the same time, I find no evidence of the direct joint determination of capital and liquidity. Finally, the first chapter partially confirms the theoretical implications of Repullo (2005). The second chapter, coauthored with Adam Geršl, Petr...CERGEFaculty of Social SciencesFakulta sociálních vě

Problems and Models in Strategic Air Traffic Flow Management

The thesis comprises of three essays. The first essay is titled "Do more US airports need slot controls? A welfare based approach to determine slot levels." It analyzes the welfare effects of slot controls on major US airports. We consider the fundamental trade-off between benefits from queuing delay reduction and costs due to simultaneous schedule delay increase to passengers while imposing slot limits at airports. A set of quantitative models and simulation procedures are developed to explore the possible airline scheduling responses through reallocating and trimming flights. We find that, of the 35 major US airports, a more widespread use of slot controls would improve travelers' welfare. The results from our analyses suggest that slot caps at the four airports that currently have slot controls (Washington Reagan, Newark, New York LaGuardia, New York John F. Kennedy) are set too high. Further slot reduction by removing some of the flights at these airports could generate additional benefits to passengers. Slot controls can potentially reduce two thirds of the total system delays caused by congestion. A number of implementation and design issues related to the use of slot controls are also discussed in the paper. The second essay is titled "Designing the Noah's Ark: A Multi-objective Multi-stakeholder Consensus Building Method." A significant challenge of effective air traffic flow management (ATFM) is to allow for various competing airlines to collaborate with an air navigation service provider (ANSP) in determining flow management initiatives. This challenge has led over the past 15 years to the development of a broad approach to ATFM known as collaborative decision making (CDM). A set of CDM principles has evolved to guide the development of specific tools that support ATFM resource allocation. However, these principles have not been extended to cover the problem of providing strategic advice to an ANSP in the initial planning stages of traffic management initiatives. In the second essay, we describe a mechanism whereby competing airlines provide ``consensus'' advice to an ANSP using a voting mechanism. It is based on the recently developed Majority Judgment voting procedure. The result of the procedure is a consensus real-valued vector that must satisfy a set of constraints imposed by the weather and traffic conditions of the day in question. While we developed and modeled this problem based on specific ATFM features, it appears to be highly generic and amenable to a much broader set of applications. Our analysis of this problem involves several interesting sub-problems, including a type of column generation process that creates candidate vectors for input to the voting process. The third essay is titled "Strategic Opportunity Analysis in COuNSEL -- A Consensus-Building Mechanism for Setting Service Level Expectations." The consensus-building mechanism described in the second essay has been accepted as a technically viable solution for the stated problem -- although many practical challenges still remain before it may be deployed in operations. A key issue worthy of further investigation is its strong strategy-resistance -- as claimed by the authors of Majority Judgment, the voting procedure embedded in COuNSEL. Using the broad ideas of Nash Equilibria, we characterize the necessary and sufficient conditions for an airline to benefit from unilaterally deviating from truthfully grading one or more candidates. The framework provides the airline with all the other airlines' grades on a set of candidates, and allows it an opportunity to present new grades. The analysis is repeated over multiple instances, and likelihood of beneficial strategic opportunity is presented

The implementation and applications of multiple-valued logic

Multiple-Valued Logic (MVL) takes two major forms. Multiple-valued circuits can implement the logic directly by using multiple-valued signals, or the logic can be implemented indirectly with binary circuits, by using more than one binary signal to represent a single multiple-valued signal. Techniques such as carry-save addition can be viewed as indirectly implemented MVL. Both direct and indirect techniques have been shown in the past to provide advantages over conventional arithmetic and logic techniques in algorithms required widely in computing for applications such as image and signal processing. It is possible to implement basic MVL building blocks at the transistor level. However, these circuits are difficult to design due to their non binary nature. In the design stage they are more like analogue circuits than binary circuits. Current integrated circuit technologies are biased towards binary circuitry. However, in spite of this, there is potential for power and area savings from MVL circuits, especially in technologies such as BiCMOS. This thesis shows that the use of voltage mode MVL will, in general not provide bandwidth increases on circuit buses because the buses become slower as the number of signal levels increases. Current mode MVL circuits however do have potential to reduce power and area requirements of arithmetic circuitry. The design of transistor level circuits is investigated in terms of a modern production technology. A novel methodology for the design of current mode MVL circuits is developed. The methodology is based upon the novel concept of the use of non-linear current encoding of signals, providing the opportunity for the efficient design of many previously unimplemented circuits in current mode MVL. This methodology is used to design a useful set of basic MVL building blocks, and fabrication results are reported. The creation of libraries of MVL circuits is also discussed. The CORDIC algorithm for two dimensional vector rotation is examined in detail as an example for indirect MVL implementation. The algorithm is extended to a set of three dimensional vector rotators using conventional arithmetic, redundant radix four arithmetic, and Taylor's series expansions. These algorithms can be used for two dimensional vector rotations in which no scale factor corrections are needed. The new algorithms are compared in terms of basic VLSI criteria against previously reported algorithms. A pipelined version of the redundant arithmetic algorithm is floorplanned and partially laid out to give indications of wiring overheads, and layout densities. An indirectly implemented MVL algorithm such as the CORDIC algorithm described in this thesis would clearly benefit from direct implementation in MVL