The diffusion of production processes in the U.S. Banking industry: A finite mixture approach

Journal of Banking and Finance

Volumn 21, Issue 5, 1997, Pages 721-740

  Beard, T Randolph ^a   Caudill, Steven B ^a   Gropper, Daniel M ^a  

^a AUBURN UNIVERSITY   (United States)

Author keywords

Bank cost functions; Efficiency; Finite mixture; Technical change

Indexed keywords

EID: 0031138796     PISSN: 03784266     EISSN: None     Source Type: Journal    
DOI: 10.1016/S0378-4266(96)00060-X     Document Type: Article

References (52)

1. Andrews, D.W.K., 1993, Tests for parameter instability and structural change with unknown change point, Econometrica 61, 821-856.
2. Andrews, D.W.K. and W. Ploberger, 1993, Admissibility of the likelihood ratio test when a nuisance parameter is present only under the alternative, Discussion paper no. 1058 (Cowles Foundation, Yale University, New Haven, CT).
3. Barth, J.R. and R.D. Brumbaugh, Jr., 1994, Moral hazard and agency problems. Research in Financial Services 6, 61-102.
4. Bauer, P.W., A.N. Berger and D.B. Humphrey, 1993, Efficiency and productivity growth in U.S. banking, In: H.O. Fried, C.A.K. Lovell and S.S. Schmidt, eds., The measurement of productive efficiency: Techniques and applications, (Oxford University Press, Oxford) 386-413.
5. Baumol, W.J., J.C. Panzar and R.D. Willig, 1982, Contestable markets and the theory of industry structure, (Harcourt-Brace-Jovanovich, New York).
6. Beard, T. Randolph, Steven B. Caudill and Daniel M. Cropper, 1991, Finite mixture estimation of multiproduct cost functions. Review of Economics and Statistics 73, 654-664.
7. Benston, G.B., 1994, Universal banking, Journal of Economic Perspectives 8, 121-143.
8. Berger, A.N. and R. DeYoung, 1996, Problem loans and cost efficiency in commerical banks, Proceedings: Bank structure and competition (Federal Reserve Bank of Chicago, Chicago, IL) May.
9. Berger, A.N., D. Hancock and D.B. Humphrey, 1993, Bank efficiency derived from the profit function, Journal of Banking and Finance 17, 317-347.
10. Berger, A.N., W.C. Hunter and S.G. Timme, 1993, The efficiency of financial institutions: A review and preview of research past, present, and future, Journal of Banking and Finance 17, 221-249.
11. Berndt, E., 1991. The practice of econometrics (Addison-Wesley, Reading, MA).
12. Berndt, E., B. Hall, R. Hall, and J. Hausman, 1974, Estimation and inference in nonlinear statistical models, Annals of Economic and Social Measurement 3, no. 4, 653-666.
13. Carter, C. and B. Williams, 1957, Industry and technical progress (Oxford University Press, London).
14. Caudill, S.B., J.M. Ford and D.M. Cropper, 1995, Frontier estimation and firm specific technical inefficiency measures in the presence of heteroscedasticity, Journal of Business and Economic Statistics 13, 105-111.
15. Cebenoyan, A.S., E.S. Cooperman, C.A. Register and S. Hudgins, 1993, The relative efficiency of stock vs mutual S&Ls: A stochastic cost frontier approach, Journal of Financial Services Research 7, 151-170.
16. Chandra, S., 1977, On the mixtures of probability distributions, Scandinavian Journal of Statistics 4, 105-112.
17. Clark, J.A., 1988, Economies of scale and scope at depository financial institutions: A review of the literature, Federal Reserve Bank of Kansas City Economic Review, 16-33.
18. David, P.A., 1969, A contribution to the theory of diffusion, Research memorandum no. 71 (Research Center on Economic Growth, Stanford University, Stanford, CA).
19. Davies, R.B., 1987, Hypothesis testing when a nuisance parameter is present only under the alternative, Biometrika 74, 33-43.
20. DeYoung, R., 1994, Fee based services and cost efficiency in commercial banks, Proceedings: The declining role of banks (Federal Reserve Bank of Chicago, Chicago, IL) May, 501-519.
21. DeYoung, R. and D.E. Nolle, 1996, Foreign-owned banks in the U.S.: Earning market share or buying it?, Journal of Money, Credit and Banking, forthcoming.
22. Everitt, B.S. and D.J. Hand, 1981, Finite mixture distributions (Chapman and Hall, New York).
23. Ferrier, G. and C.A.K. Lovell, 1990, Measuring cost efficiency in banking: Econometric and linear programming evidence, Journal of Econometrics 46, 229-240.
24. Grabowski, R., N. Rangan and R. Rezvanian, 1993, Organizational forms in banking: An empirical investigation of cost efficiency, Journal of Banking and Finance 17, 531-538.
25. Griliches, Z., 1957, Hybrid corn: An exploration in the economics of technological change, Econometrica 25, 501-522.
26. Gropper, D.M., 1991, An empirical investigation of changes in scale economies for the commercial banking firm: 1979-1986, Journal of Money, Credit and Banking 23, 718-727.
27. Gropper, D.M., 1995, Product line deregulation and the cost structure of U.S. savings and loans, Applied Economics 27, 183-191.
28. Gropper, D.M. and T.R. Beard, 1995, Insolvency, ownership structure, and expense preference behavior: Further evidence for U.S. savings and loan associations, Managerial and Decision Economics 16, 607-617.
29. Gropper, D.M. and S.L. Oswald, 1996, Regulation, deregulation and managerial behavior: New evidence on expense preference in banking, Applied Financial Economics 6, 1-7.
30. Hancock, D., 1985, The financial firm: Production with monetary and nonmonetary goods, Journal of Political Economy 93, 859-879.
31. Hannan, T. and J. McDowell, 1984, Market concentration and the diffusion of new technology in the banking industry, Review of Economics and Statistics 66, 686-691.
32. Hansen, B.E., 1992, The likelihood ratio test under nonstandard conditions: Testing the Markov switching model of GNP, Journal of Applied Econometrics 7, 561-582.
33. Hartley, M., 1978, Comment on: 'Estimating mixtures of normal distributions and switching regressions' by Quandt and Ramsey, Journal of the American Statistical Association 73, no. 364, 738-741.
34. Humphrey, D.B., 1993, Cost and technical change: Effects from bank deregulation, Journal of Productivity Analysis 4.
35. LeCompte, R.L.B. and S.D. Smith, 1990, Changes in the cost of intermediation: The cost of savings and loans, Journal of Finance 45, 1337-1346.
36. Mahajan, A., N. Rangan and A. Zardkoohi, 1996, Cost structures in multinational and domestic banking. Journal of Banking and Finance 20, 283-306.
37. Mansfield, E., 1968a, Industrial research and technological innovation (W.W. Norton, New York).
38. Mansfield, E., 1968b, The economics of technological change (W.W. Norton, New York).
39. McLachlan, G.J., 1987, On bootstrapping the likelihood ratio test statistic for the number of components in a normal mixture, Applied Statistics 36, no. 3, 318-324.
40. Mester, L.J., 1993, Efficiency in the savings and loan industry, Journal of Banking and Finance 20, 389-405.
41. Mester, L.J., 1995, Measuring efficiency at U.S. banks: Accounting for heterogeneity is important, Working paper (Economic Research Division, Federal Reserve Bank of Philadelphia, Philadelphia, PA).
42. Miller, S.M. and A.G. Noulas, 1996, The technical efficiency of large bank production, Journal of Banking and Finance 20, 495-509.
43. Quandt, R., 1972, A new approach to estimating switching regressions, Journal of the American Statistical Association 67, no. 17, 306-310.
44. Quandt, R., 1988, The econometrics of disequilibrium (Basil Blackwell, New York).
45. Quandt, R. and J. Ramsey, 1978, Estimating mixtures of normal distributions and switching regressions, Journal of the American Statistical Association 73, no. 364, 735-747.
46. Reinganum, J.F., 1989, The timing of innovation: Research, development and diffusion, In: R. Schmalensee and R. Willig, eds., Handbook of industrial organization (Elsevier Science Publishers, Amsterdam).
47. Romeo, A., 1975, Interindustry and interfirm differences in the rate of diffusion of an innovation, Review of Economics and Statistics 57, 311-319.
48. Spence, M., 1984, Cost reduction, competition, and industry performance, Econometrica 52, no. 1, 101-121.
49. Teicher, H., 1963, Identifiability of finite mixtures, Annals of Mathematical Statistics 34, 1265-1269.
50. Titterington, M., A. Smith and V. Makov, 1985, Statistical analysis of finite mixture distributions (Wiley, New York).
51. Wolfe, J.H., 1971, A Monte Carlo study of the sampling distribution of the likelihood ratio for mixtures of normal distributions, Technical bulletin STB 72 (U.S. Naval Personnel and Training Research Laboratory, San Diego, CA).
52. Yakowitz, S. and J. Spragins, 1969, On the identifiability of finite mixtures, Annals of Mathematical Statistics 40, 1728-1735.