Please use this identifier to cite or link to this item:
Title: Financial frictions, bank efficiency and risk: Evidence from the Eurozone
Authors: Chortareas, GE
Girardone, C
Ventouri, A
Keywords: Financial Frictions;Efficiency;Risk;Asset Quality;Eurozone Banks;Simultaneous Equations Models
Issue Date: 2011
Publisher: Wiley-Blackwell
Citation: Journal of Business Finance and Accounting, 38(1-2), 259 - 287, 2011
Abstract: This paper employs a simultaneous equations approach to investigate the dynamics between financial frictions, efficiency and risk for eurozone's commercial banks. We consider two related channels through which financial frictions may arise: informational and market structure imperfections, and allow for a possible reverse causation from efficiency to banks’ asset quality. The findings validate the presence of both channels of financial frictions and are consistent with the efficiency-lending quality hypothesis that low efficiency signals poor asset quality loans. Finally, our findings suggest that policies aimed at constraining banks’ degree of openness may ultimately direct management choices towards riskier investments.
Description: This is the author's accepted manuscript. The final published article is available from the link below. Copyright @ 2011 Blackwell Publishing Ltd.
ISSN: 0306-686X
Appears in Collections:Economics and Finance
Dept of Economics and Finance Research Papers

Files in This Item:
File Description SizeFormat 
Fulltext.pdf260.33 kBAdobe PDFView/Open

Items in BURA are protected by copyright, with all rights reserved, unless otherwise indicated.