Cost efficiency and UK building societies. An econometric panel-data study employing a flexible fourier functional form

The paper empirically quantifies firm specific 'distribution free' cost efficiency, economies of scale and economies of scope in the UK building society sector between 1990-1995. Both a flexible Fourier and a translog functional form are employed with an intermediation representation of depository institution production. Differences in the performance of these two functional forms are found. A broad distribution of cost efficiency over the sample period is observed, with a mean efficiency of 76 per cent estimated using the flexible Fourier form and a mean efficiency of 72.52 per cent estimated employing the translog form. Distinct results for economies of scale are produced with the two models

Total factor productivity growth and technical change in UK building societies: 1990-95

The total factor productivity and technical change within the UK building society sector are examined in this paper. Total factor productivity growth is measured using a cost function shift approach. An intermediation model of bank production with a translog specification of productive technology is employed. Static total factor productivity growth is observed over the sample period. Very Low levels of technical change are found

A test of perfect competition in the UK retail-banking deposit market

This paper presents a test for perfect competition in the deposit market of the UK retailbanking sector. The model employed draws from the NEIO technique forwarded by Hannan and Liang (1993). The test is applied to a sample of 8 UK retail banks between 1992-97. The presence of perfect competition is rejected for all banks. The empirical evidence does not support the qualitative evidence of increasing competitiveness amongst UK retail banks

A general test of competitive conditions in the UK building society Mortgage Market: 1990-95

The Rosse-Panzar statistic is used to test for market conduct and contestability within the UK building society mortgage market between 1990 and 1995. The statistic considers the distinction between monopolistic competition and profit maximising monopoly. Following Panzar and Rosse (1987), analysis of monopolistic competition can be seen to be concerned with both an individual and a group equilibrium. The comparative static approach of the Rosse-Panzar statistic is employed to test for this situation. Evidence of long-run competitive equilibrium or profit maximising monopoly is rejected. Presence of a contestable market with monopolistic competition is not rejected. The stability of incumbents market share is employed to test for a small firms bias (Shaffer, 1982). Evidence of a small firms bias is rejected

Cost efficiency, economies of scale and economies of scope in the British retail banking sector

In this paper the efficiency characteristics of the British retail banking sector are investigated. Distribution free cost efficiency, economies of scale and economies of scope are all measured. The study employs a one way fixed effects model with a translog specification of productive technology. Both ‘production’ and ‘intermediation’ models of bank production are employed and contrasted. A substantial distribution of cost efficiency is observed in this most important commercial sector. Overall, slight dis-economies of scale are reported for the ‘intermediation’ approach and substantial diseconomies of scale are recorded for the ‘production’ approach. A substantial dispersion of cost efficiency is observed for this sector with both model specifications

Market definition of the UK deposit saving account market

This study examines the definition of the UK deposit savings account market. A testing procedure is used to ascertain if the law of one price and the assumption of a unified national market may or may not be rejected. The existing UK and European literature on the definition of financial services markets is developed by using both product specific interest rate data and by incorporating non-price characteristics of financial services products in the testing procedure. This study indicates a unified UK market may be rejected for deposit saving accounts. Such a result is consistent with previous surveys of customers’ preferences (Kwast et al, 1998 and Cruickshank, 2000), which provide an indication of demandside conditions in this market. The conclusions also provide empirical support for a number of theoretical perspectives including the development of two-tier banking markets across Europe (see for example Goodhart, 1987, Williams and. Gardener, 2000)

Economies of scale and capital utilisation in the English and Welsh water supply industry

This study estimates a variable cost model of the UK water industry. From this variable cost function, estimates of economies of scale and economies of capital utilisation and capacity utilisation are made. The data used in the study consists of 20 English and Welsh water companies. The results suggest that only slight, albeit, significant dis-economies of scale and substantial dis-economies of capital utilisation exist in the industry. These estimates indicate that if output increases, with or without holding capital constant, variable costs would increase at a level above the proportional increase in output. Both these results indicate that if the water industry has not been in long-term equilibrium (in terms of capital) both merger and acquisition amongst water companies (a process that is occurring) is not justified in terms of cost efficiency. A low level of capital utilisation is indicated for the water industry. It is shown that the level of capital utilisation does increase over the sample period to approximately 30 per cent in 1996, indicating disequilibrium, in terms of capital, is present in this sector

Productivity, efficiency and competition of UK depository institutions.

In the thesis, a number of cost characteristics of the UK building society and retail banking sectors are estimated using econometric techniques. The cost characteristics considered broadly fall into the three areas of productivity, efficiency and competitiveness. The study was undertaken with the aim of considering both the magnitude and degree of change in these cost characteristics over time. This assessment is deemed to be important due to the wide-ranging changes in the regulatory, institutional and market environment of both these sectors. For reasons of structure and clarity, the thesis is divided into two parts. The first part of the thesis provides a broad discussion of the operating environment, the model specification, variable definition, the concept of efficiency, econometric techniques, previous literature and the form of the statistics used to measure the relevant economic characteristics. The second part of the thesis contains the empirical studies in which economic characteristics are estimated. Cost efficiency is measured for both the retail banking and building society sectors using differing model forms and distinct functional forms. Fixed effects panel data techniques are employed in both studies. Both model specification and functional forms are deemed to influence the estimates produced. It is discovered that both sectors experience a degree of cost efficiency dispersion. Measures of economies of scale and product mix are also estimated with positive economies of scale and constant returns to scale found in the retail bank and building society sectors, respectively. The findings from the analysis of economies of product mix are less than clear. Nevertheless, it may be stated that the re-regulation which allowed a greater degree of product diversification in the building society sector appears to be justified in terms of cost efficiency. Very low levels of technical change and total factor productivity growth are found for both sectors. The degree of competitiveness of the building society sector was assessed using a revenue function approach. The results suggest that both retail banks and building societies operate in markets characterised by a moderate degree of monopolistic competition

Board leadership structure for Chinese public listed companies

It is widely accepted that board leadership structure and whether the chairperson and CEO roles should be undertaken jointly or separately affects the performance of a firm. Despite this consensus, empirical evidence presents major uncertainties as to the direction and degree of this influence. This study contributes to this debate by examining the relationship between board leadership structure and firm performance and the expense ratio, using propensity-score matching methods for Chinese PLCs from 2003�2010. It is reported that whilst CEO duality is not related to companies' profitability ratios, it is linked to a higher expense ratio compared to matched companies with a separate board leadership structure. This indicates that a separate board leadership structure is an effective corporate governance arrangement to reduce agency costs for Chinese PLCs

Phosphoranyl Radical Fragmentation Reactions Driven by Photoredox Catalysis

Photocatalytic generation of phosphoranyl radicals is fast emerging as an essential method for the generation of diverse and valuable radicals, typically via deoxygenation or desulfurization processes. This Perspective is a comprehensive evaluation of all studies using phosphoranyl radicals as tunable mediators in photoredox catalysis, highlighting how two distinct methods for phosphoranyl radical formation (radical addition and nucleophilic addition) can be used to generate versatile radical intermediates with diverse reactivity profiles