Bank efficiency and financial centres: Does geographical location matter?

Abstract

This paper examines the relationship between bank performance and geographical location with respect to the two major global financial centres, New York and London. It provides new insights on the spatial effects of the 2008–2009 Global Financial Crisis (GFC) on the technical efficiency of the top-1000, world-leading banks in terms of total assets. The results reveal that the distance of banks' headquarters to these financial centres matters. In particular, banks that are located at a bigger distance from New York and London present a lower technical efficiency than banks that are closer to these financial centres. In addition , the results show that the Global Financial Crisis has magnified the effect of distance and the need for banks to be closer to global financial centres during the 'core' of that period.

Citation

Degl’Innocenti, M., Matousek, R., Sevic, Z., & Tzeremes, N. G. (2017). Bank efficiency and financial centres: Does geographical location matter?. Journal of International Financial Markets, Institutions and Money, 46, 188-198. https://doi.org/10.1016/j.intfin.2016.10.002

• Journal Article Type: Article
• Acceptance Date: Oct 27, 2016
• Online Publication Date: Nov 2, 2016
• Publication Date: 2017-01
• Deposit Date: Mar 11, 2019
• Journal: Journal of International Financial Markets, Institutions and Money
• Print ISSN: 1042-4431
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 46
• Pages: 188-198
• DOI: https://doi.org/10.1016/j.intfin.2016.10.002
• Keywords: Bank performance; Financial centres; Conditional efficiency; Robust estimators
• Public URL: https://nottingham-repository.worktribe.com/output/1625068
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S104244311630141X
• Additional Information: This article is maintained by: Elsevier; Article Title: Bank efficiency and financial centres: Does geographical location matter?; Journal Title: Journal of International Financial Markets, Institutions and Money; CrossRef DOI link to publisher maintained version: https://doi.org/10.1016/j.intfin.2016.10.002; Content Type: article; Copyright: © 2016 Elsevier B.V. All rights reserved.