An Analysis of Efficiency and Loan Loss Provisioning Behavior in Japanese Banking
This paper aims to test the determinants of loan loss provisions in Japanese banking system over the sample period 2006-2013 with respect to sample bank’s efficiency performance level (scores). In the first stage, these scores are estimated from the Stochastic Frontier Approach translog cost functio...
| Main Author: | |
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| Format: | Dissertation (University of Nottingham only) |
| Language: | English |
| Published: |
2014
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| Online Access: | https://eprints.nottingham.ac.uk/27502/ |
| _version_ | 1848793384168194048 |
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| author | Hou, Jia Kun |
| author_facet | Hou, Jia Kun |
| author_sort | Hou, Jia Kun |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | This paper aims to test the determinants of loan loss provisions in Japanese banking system over the sample period 2006-2013 with respect to sample bank’s efficiency performance level (scores). In the first stage, these scores are estimated from the Stochastic Frontier Approach translog cost function. It is found that the average efficiency level for Japanese banks is 72.9% which indicates a lower efficiency gain for sample banks. In the second stage, the Generalized Method of Moments (GMM) estimator is adopted in the analysis. The empirical findings demonstrate the existence of procyclicality and capital management hypothesis whilst there is no substantial evidence of income smoothing behaviors for the sample banks. Moreover, efficiency is found to be a vital part in loan loss provisioning decision (while Z not); hence failure to incorporate it in loan loss provisions study may cause the model to be biased. |
| first_indexed | 2025-11-14T18:59:26Z |
| format | Dissertation (University of Nottingham only) |
| id | nottingham-27502 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T18:59:26Z |
| publishDate | 2014 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-275022017-10-19T14:04:01Z https://eprints.nottingham.ac.uk/27502/ An Analysis of Efficiency and Loan Loss Provisioning Behavior in Japanese Banking Hou, Jia Kun This paper aims to test the determinants of loan loss provisions in Japanese banking system over the sample period 2006-2013 with respect to sample bank’s efficiency performance level (scores). In the first stage, these scores are estimated from the Stochastic Frontier Approach translog cost function. It is found that the average efficiency level for Japanese banks is 72.9% which indicates a lower efficiency gain for sample banks. In the second stage, the Generalized Method of Moments (GMM) estimator is adopted in the analysis. The empirical findings demonstrate the existence of procyclicality and capital management hypothesis whilst there is no substantial evidence of income smoothing behaviors for the sample banks. Moreover, efficiency is found to be a vital part in loan loss provisioning decision (while Z not); hence failure to incorporate it in loan loss provisions study may cause the model to be biased. 2014 Dissertation (University of Nottingham only) NonPeerReviewed application/pdf en https://eprints.nottingham.ac.uk/27502/1/jiakun.pdf Hou, Jia Kun (2014) An Analysis of Efficiency and Loan Loss Provisioning Behavior in Japanese Banking. [Dissertation (University of Nottingham only)] (Unpublished) |
| spellingShingle | Hou, Jia Kun An Analysis of Efficiency and Loan Loss Provisioning Behavior in Japanese Banking |
| title | An Analysis of Efficiency and Loan Loss Provisioning Behavior in Japanese Banking |
| title_full | An Analysis of Efficiency and Loan Loss Provisioning Behavior in Japanese Banking |
| title_fullStr | An Analysis of Efficiency and Loan Loss Provisioning Behavior in Japanese Banking |
| title_full_unstemmed | An Analysis of Efficiency and Loan Loss Provisioning Behavior in Japanese Banking |
| title_short | An Analysis of Efficiency and Loan Loss Provisioning Behavior in Japanese Banking |
| title_sort | analysis of efficiency and loan loss provisioning behavior in japanese banking |
| url | https://eprints.nottingham.ac.uk/27502/ |