Impact of learning through credit and value creation on the efficiency of Japanese commercial banks

Aduba, Joseph Jr.; Izawa, Hiroshi

doi:10.1186/s40854-021-00268-8

Financial Innovation

Table 3 Estimated progress

From: Impact of learning through credit and value creation on the efficiency of Japanese commercial banks

	(1) EVA	(2) FISIM (GO)	(3) Credit (tloans)		(4) Secinv	(5) TI
Panel A: Full Sample
\({\varnothing }_{it-1}\)	0.1033**	− 0.4050***	− 0.3910***		− 0.6314***	− 0.3841***
	(0.0491)	(0.0609)	(0.0357)		(0.0357)	(0.0349)
\(Hypothesis\)	Reject	Do not reject	Do not reject		Do not reject	Do not reject
Estimated progress ratios
\({\delta }_{t}\)	1.074	0.755	0.763		0.646	0.766
\({\delta }_{t}\)(%)	107.42	75.50	76.26		64.55	76.63
100-\({\delta }_{t}\)(%)	− 7.42	24.50	23.74		35.45	23.37
Cost implication	Inefficient	Efficient	Efficient		Efficient	Efficient
Panel B: City Banks
\({\varnothing }_{it-1}\)	0.3070**	− 0.4488*	− 0.0098	− 0.3748***		− 0.0975**
	(0.0674)	(0.1648)	(0.0328)	(0.0528)		(0.0253)
\(Hypothesis\)	Reject	Do not reject	Reject	Do not reject		Do not reject
Estimated progress ratios
\({\delta }_{t}\)	1.2371	0.733	0.993	0.771		1.070
\({\delta }_{t}\)(%)	123.71	73.27	100.0	77.12		106.99
100-\({\delta }_{t}\)(%)	− 23.71	26.73	0.00	22.88		− 6.99
Cost implication	Inefficient	Efficient	Inefficient	Efficient		Efficient
Panel A: Regional Bank I
\({\varnothing }_{it-1}\)	0.1171**	− 0.4278***	− 0.4435***	− 0.5837***		− 0.3957***
	(0.0505)	(0.1825)	(0.0408)	(0.0473)		(0.0400)
\(Hypothesis\)	Reject	Do not reject	Do not reject	Do not reject		Do not reject
Estimated progress ratios
\({\delta }_{t}\)	1.085	0.7434	0.735	0.667		0.760
\({\delta }_{t}\)(%)	108.46	74.34	73.53	66.73		76.01
100-\({\delta }_{t}\)(%)	− 8.46	25.66	26.47	33.27		23.99
Cost implication	Inefficient	Efficient	Efficient	Efficient		Efficient
Panel A: Regional Bank II
\({\varnothing }_{it-1}\)	0.0798	− 0.2411***	− 0.4115***	− 0.7257***		− 0.4315***
	(0.0717)	(0.0426)	(0.0506)	(0.0279)		(0.0511)
\(Hypothesis\)	Reject	Do not reject	Do not reject	Do not reject		Do not reject
Estimated progress ratios
\({\delta }_{t}\)	1.057	0.846	0.752	0.605		0.7415
\({\delta }_{t}\)(%)	105.69	84.61	75.18	60.47		74.15
100-\({\delta }_{t}\)(%)	− 5.69	15.39	24.82	39.53		25.85
Cost implication	Inefficient	Efficient	Efficient	Efficient		Efficient

Driscoll–Kraay standard errors in parenthesis.
*** p < 0.01, ** p < 0.05, * p < 0.1
\(\text{EVA}\,\sim\, \text{economic value added,}\)
FISIM(GO)\(\sim \mathrm{Financial}\,\mathrm{Intermediation}\,\mathrm{Services}\,\mathrm{Indirectly}\,\mathrm{Measured}\,(\mathrm{Gross}\,\mathrm{Output})\)
\(\text{FBI}\,\sim \text{fee based income},\)
\(\text{tloans}\sim \text{total loans},\)
\(\text{TI}\,\sim \text{Total Investment}\)
\({\varnothing }_{it-1}\sim \text{learning elasticity}\)

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