Table 1 Variable and hypothesis descriptions
From: Impact of learning through credit and value creation on the efficiency of Japanese commercial banks
Output | Symbol | Description | Remark | Hypothesis | |||
|---|---|---|---|---|---|---|---|
Expectation | Implication | ||||||
Panel A: Outputs | |||||||
EVA | \({\varnothing }_{eva}\) | Economic value-added, defined as a dollar surplus on capital invested | Can be cumulated and proxied for experience shareholder in value creation | Negative (−) and significant | Unit cost decreases with cumulative experience in economic value created | ||
FISIM | \({\varnothing }_{fisim}\) | Spread between interest received and interest paid adjusted by a risk factor | Can be cumulated and proxied for experience in credit/risk management | Negative (−) and significant | Unit cost decreases with cumulative experience in gross value added to the economy | ||
TC | \({\varnothing }_{TC}\) | Total credit created (sum of all loans) | Naturally reported as cumulative loans issued and can be proxied for experience in total credit creation (interest-bearing assets) | Negative (−) and significant | Unit cost decreases with cumulative experience in lending to the real sector (loans) | ||
TS | \({\varnothing }_{TS}\) | Total security investment | Naturally reported as cumulative investment in securities and other investment | Negative (−) and significant | Unit cost decreases with cumulative experience in lending to the real sector (loans) | ||
TI | \({\varnothing }_{Ti}\) | Interest on total investment | Can be cumulated and proxied for experience in credit/risk management | Negative (−) and significant | Unit cost decreases with cumulative experience in total investment | ||
Panel B: Inputs | |||||||
Input prices | \({w}_{s}\) | Widgets of input prices; physical capital (sum of input prices of labour and tangible fix assets) \({w}_{p},\) price of deposit/debt \({w}_{d}\), and price of capital \({w}_{k}\) | |||||
NPL | \({R}_{i}\) | Assets qualities (risk) defined as the amount of non-performing loans | |||||
Equity capital | \(K\) | Equity capital estimated as the sum of shareholder equity, loan loss reserve, Tier 1 and Tier 2 capital | |||||