11 research outputs found
Bank performance and executive pay: tournament or teamwork
We investigate the relationship between the dispersion of executive pay and bank performance/valuation by examining two competing theories, the tournament theory (hierarchical wage structure) and the equity fairness theory (compressed wage structure). The key variable of executive pay dispersion is measured using a hand-collected dataset composed of 63 banks from OECD countries and 29 banks from developing countries. The dataset covers the period 2004 to 2012. By combining and modifying a translog profit function and a pay-dispersion model, we are able to address the potential problems of relying on reduced-form estimation. In our subsample of developed and civil law countries, where bank performance is measured by either Tobin’s Q or by the price-to-book ratio, the overall impact of executive pay dispersion is mostly negative, and we find supporting evidence for the equity fairness theory, except for very high levels of dispersion. There is a non-linear effect, as banks perform best when there is either very low or very high executive pay dispersion. For developing country sample banks, greater executive pay dispersion has a negative impact on bank profit. In our subsample of common law countries, however, we find no evidence of a significant impact of executive pay dispersion on bank performance. We conclude that lower executive pay dispersion, a proxy for teamwork, is mostly effective in enhancing bank performance in a significant section of sample banks, i.e., civil law and developing countries
Cost of small business banking: a New Zealand study
Small business banking, Cost of banking, Simulation model,
Analysing household and intra-urban variants in the consumption of financial services: uncovering "exclusion" in an English city
The institutional environment and the number of bank relationships: an empirical analysis of European SMEs
Creditor rights, SMEs, Bank relationships, Legal environment, Financial systems, G21, G32, L26,
Pricing of Loan Commitments for Facilitating Stochastic Liquidity Needs
Pricing of bank loan commitments, Liquidity needs, Bank liquidity reserve holding, G12, G21,
Student Loans, Debtfare and the Commodification of Debt: The Politics of Securitization and the Displacement of Risk
National culture and financial systems
Countries differ in the way their financial activities are organized. In Anglo-Saxon countries such as the US and the UK financial systems are dominated by stock markets, whereas in continental Europe and Japan banks play a predominant role. Why do countries differ in the configuration of their financial systems? We argue that national culture plays a significant role. We find that countries characterized by higher uncertainty avoidance are more likely to have a bank-based system. Journal of International Business Studies (2006) 37, 227–247. doi:10.1057/palgrave.jibs.8400188