Managerial Ownership And Dividend Policy In The U.S. Banking Industry

This paper examines a sample of U.S. Bank Holding Companies (BHCs) to determine if there is a relationship between managerial equity ownership (insider holdings) and the level of dividends paid out by the BHC. Given the findings of prior research, the analysis is performed using Two-Stage Least Squares (2SLS) regression with three equations. The three dependent variables are DIVPAY (dividend payout), DEBT (total liabilities over total consolidated assets) and INSIDER (percentage of common stock held by officers and directors). This study finds that insider holdings has a non-linear relation with dividend payout. Initially, there is a significant negative relation between the level of insider holdings and the level of dividends paid. However, higher levels of insider holdings show a positive relation with the level of dividends paid

Bank Growth Choices and Changes In Market Performance

Changes in bank market performance are compared for banks that choose not to grow, to branch, bank acquire, product expand, or some combination. Using the change in market value-to-book value ratios, banks that include acquiring other banks as part of their growth strategy have significant positive changes in performance. Positive performance by bank acquirers is in contrast to many studies, but prior research has not reviewed other growth activities in a single model, nor used market-based measures to review performance over longer time periods following bank expansion

Electronic communication networks, market makers, and the components of the bid-ask spread

Purpose – The purpose of this paper is to investigate how quotes originating via electronic communication networks (ECN)s affect trading costs. Design/methodology/approach – In order to investigate the relations between trading costs and quotation venue, the bid-ask spread is decomposed into its theoretical cost components associated with adverse selection, inventory handling, and order processing. Findings – Stoll's adverse selection costs of ECN-originated quotes relate positively to effective spreads, while Lin et al.'s adverse selection costs relate negatively to effective spreads. Originality/value – The paper shows how trading costs relate to trading venue choice by decomposing the bid-ask spread.Bid offer spread, Communication technologies, Market system

Determinants of Bank Growth Choice

We study the determinants of bank growth in a two-stage logistic regression model. We first compare banks that branch, Bank Acquire, or Product Expand with banks that do not grow externally. Banks that are federally chartered, in states with higher income growth, and with higher labor prices are less likely to grow externally. Larger banks are more likely to grow externally. In the second stage, we study determinants of growth activity for banks that expand products, branch, or acquire other banks. Depending on the time period, bank structure, regulatory environment, performance, and balance sheet characteristics determine bank growth choices. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: G21; G34