The efficiency of U.S. agricultural banking /
Recent changes in the regulation of U.S. financial
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| Format: | Thesis Book |
| Language: | English |
| Published: |
[Place of publication not identified] :
[publisher not identified] ;
1994.
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| Subjects: | |
| Online Access: | http://proxy.library.tamu.edu/login?url=http://proquest.umi.com/pqdweb?did=741945111&sid=1&Fmt=2&clientId=2945&RQT=309&VName=PQD |
| Summary: | Recent changes in the regulation of U.S. financial institutions have had a major impact on bank industry structure and Performance. The future ability of commercial banks to deliver agricultural debt efficiently will play a key role in determining the efficiency of U.S. agricultural production. This study examines three major issues in estimating banking inefficiency. These include: (1) selection of proper functional form and the sensitivity of estimated banking inefficiency to choice of functional form, (2) exogeneity tests on profit and cost functions and the sensitivity of inefficiency estimates to model specification and (3) determinants of technical and allocative inefficiency. Crosssectional data for 1990 from 1,805 U.S. agricultural banks are used for this study. First, the three most commonly used quadratic functional forms -- translog, normalized quadratic and generalized Leontief -- are estimated using both Box-Cox nested testing procedures and the nomested likelihood dominance criterion approach. The nested test results indicate that all three restricted forms are rejected against the alternative unrestricted quadratic Box-Cox model. The nonnested test results render a clear ordering of the restricted forms and indicate that the translog is the preferred functional form among these three alternatives for modeling the cost function of agricultural banks. Using one of the other functional forms affects conclusions about scale elasticities and inefficiencies. Second, the Hausman exogeneity test is applied to both cost and profit functions for banks. Results indicate that the operating behavior of banks in this study satisfy exogeneity assumptions of both the cost and profit function specifications. Since profit maximizers must be cost minimizers, the profit function approach incorporates a linkage with the cost function approach. However, the two approaches differ in specification and implementation. These differences are responsible for important differences in the empirical results. Finally, seemingly unrelated regression (SUR) is used to estimate the selected characteristics of banking inefficiency. SUR estimation results indicate that the effects of envirorunental variables on the input and output inefficiency measures are inconsistent. Increasing bank assets and profitability in addition to bank holding company affiliation help banks improve their total efficiency. |
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| Item Description: | Vita. "Major Subject: Agricultural Economics". |
| Physical Description: | ix, 126 leaves ; 28 cm. Issued also on microfiche from University Microfilms Inc. |
| Bibliography: | Includes bibliographical references. |