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What is the impact of bankrupt and restructured loans on Japanese bank efficiency?
journal contribution
posted on 2023-06-08, 22:12 authored by Emmanuel Mamatzakis, Roman Matousek, Anh VuAnh VuThe Japanese banking system provides a distinctive platform for the examination of the long-lasting effect of problem loans on efficiency. We measure technical efficiency by modifying a translog enhanced hyperbolic distance function with two undesirable outputs, identified as problem loans and problem other earning assets. Our unique database allows us to distinguish between bankrupt and restructured loans to investigate the underlying causality between these loans and efficiency. From the flexible panel vector autoregression specification, primary results reveal that bankrupt loans have a positive impact on efficiency related to the “moral hazard, skimping” hypothesis, with the causality originating from bankrupt loans. In contrast, findings for the relationship between restructured loans and efficiency support the “bad luck” hypothesis.
History
Publication status
- Published
File Version
- Accepted version
Journal
Journal of Banking and FinanceISSN
0378-4266Publisher
ElsevierExternal DOI
Issue
Supp.Volume
72Page range
S187-S202Department affiliated with
- Business and Management Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2015-08-25First Open Access (FOA) Date
2018-04-21First Compliant Deposit (FCD) Date
2015-08-25Usage metrics
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