Abstracts » Business

Comment on Goldberg and White

Article Abstract:

The work conducted by Lawrence G. Goldberg and Lawrence G. White does not only provide a significant overview on the importance of banks to small business lending, but offer substantial insights on major policy issues, as well. If the assumption that bank age is inversely related to lending capacity, therefore government officials must be discouraged from prohibiting the formation of new banks since small businesses would be deprived of financial resources. Results further imply that further consolidation would eventually decrease the lending capacity of banks.

Venture Capital Companies, Miscellaneous Intermediation, Investors, not elsewhere classified, Analysis, Finance, Small business, Venture capital

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Comment on 'operational efficiency in banking: an international perspective.'

Article Abstract:

Allen and Rai's (1996) paper on operational efficiency in banking arrive at two main conclusions which state that the occurrence of input x-inefficiencies are more significant than the existence of output inefficiencies. However, their conclusions which state that the distribution-free (DF) model overestimates the extent of x-inefficiencies when compared to the stochastic cost frontier (SCF) method are erroneous. Comparison of both the DF and the SCF methods using rank order correlation can better assess the two approaches as tests of relative bank efficiency.

Management

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Operational efficiency in banking: an international comparison

Article Abstract:

A corrected inefficiency method was employed to evaluate the estimates of efficiency in international banking using the distribution free (DF) approach and the results from using the stochastic cost frontier (SCF). Results from using the method are identical in revealing the DF approach to better the SCF approach in evaluating efficiency, with substantially higher measures than the latter method.

Inequalities (Mathematics)

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