Most of the early studies of bank efficiency focused on scale and product mix efficiency, or how close banks are to producing at the scale or product mix that minimizes costs per unit of output. ...Despite these past efforts, something rather important is missing from most of the analysis according to the authors - evaluation of bank branch efficiency. There has been very little empirical research on bank branch efficiency because branching data generally are confidential and not required by regulators. This paper tries to add to the limited information available about bank branch efficiency. It specifies the Fourier-Flexible nonparametric form for the cost function to characterize the efficient frontier for bank branches, the first application of the form in a frontier efficiency context. This form is applied to over 760 branches of a large U.S. commercial bank for three years of 1989, 1990, and 1991. The authors specify and compare models that employ two different concepts of bank costs and output - the intermediation approach and the production approach. The data set includes information on several types of transactions, allowing for more accurate efficiency estimation. The authors also have information on interbranch transactions, which allows them to account for the services that one branch provides for the customers of another branch. The study is a first of its kind from many perspectives in its methodological approaches, its conceptual approaches that compare and contrast the "intermediation" and "production" approaches to defining branch output, linking the relationship between branch efficiencies and bank efficiencies, the problems associated with bank mergers, and the effects of branch efficiency on price or branch offices to be sold. The empirical results are mutually consistent between the intermediation and production approaches and robust to other variations in specifications. The data suggest that most branches are considerably smaller than efficient scale - there are roughly twice as many branches as are needed to minimize bank cost. However, the average cost curves are relatively flat. The cost of "overbranching" is at most about 13.9% of operating costs and about 3.3% of total branching costs. Some cost scale inefficiency may be optimal from a profitability standpoint, according to the authors, since additional offices provide convenience for the bank's customers that may be recaptured by the bank on the revenue side. The branch level X-inefficiencies dominate the scale effects, similar to the findings in bank-level research. The branching data reveal that some of the bank's branches do not perform to the level of its own best practice branch, which is a necessary condition for full efficiency. The bank may still be fully efficient relative to a conventional bank frontiers which allows for banks to be measured as efficient even if they have branches that are inefficient. The dispersion of measure X-efficiency also suggests that the quality of the local managers also is important in determining performance. The authors believe branch inefficiencies may help explain the often-measured scale diseconomies at the bank level for large branching banks, as the additional offices attract more total customers for the bank as a whole. They also may help explain the large cost X-inefficiencies typically found at the bank level, since the total cost of producing the bank's same total output level could be reduced by having fewer branches, each producing more output. The empirical results also suggest that it may be very difficult for banks to achieve large branch cost saving through mergers. The ability to achieve savings by closing branches that are below cost-efficient scale or are very X-inefficient depends upon the proximity of other branches that are both relatively X-efficient and can absorb the additional output without significant scale diseconomies. The potential for improvements from superior bank management also appears to be limited by the importance of the quality of local branch mangers. The empirical results also suggest there are substantial differences in the value of bank branches that depend on efficiency. An efficient branch may be worth more than twice as much as an inefficient branch with the same deposit base. Premium paid data confirm this implication. The authors suggest that banks may be able to improve the efficiency of their branching networks by using efficiency measures along with their own performance measures. Relative efficiencies may be used as an incentive or monitoring device. Observation of the most efficient and least efficient offices also could help discover efficient and inefficient practices, respectively, that may be used to improve management policies and procedures.
This paper is the first to directly estimate the determinants of differences in premiums received by public and private sellers in the market for bank branches (deposit bases). Deposit premiums ...received in private sector transactions exceeded those received by the FDIC and the RTC, even after controlling for known characteristics of the transactions and after corrections for possible sample selection bias. The observed differential disappeared by 1992, suggesting improved market efficiency and/or the impact of FDICIA (1991), which mandated "least-cost" resolution procedures for failed institutions. Additionally, the evidence suggests that bank branches are independent value objects whose auctions always result in "unintended" transfers of value to the winning bidders. This result, while consistent with previous literature that found positive cumulative abnormal returns (CARs) to the winners of auctions for the branches of failed banks, nevertheless suggests that not all of the positive CARs can be due to market inefficiency.
This paper is the first to directly estimate the determinants of differences in premiums received by public and private sellers in the market for bank branches (deposit bases). Deposit premiums ...received in private sector transactions exceeded those received by the FDIC and the RTC, even after controlling for known characteristics of the transactions and after corrections for possible sample selection bias. The observed differential disappeared by 1992, suggesting improved market efficiency and/or the impact of FDICIA (1991), which mandated "least-cost" resolution procedures for failed institutions. Additionally, the evidence suggests that bank branches are independent value objects whose auctions always result in "unintended" transfers of value to the winning bidders. This result, while consistent with previous literature that found positive cumulative abnormal returns (CARs) to the winners of auctions for the branches of failed banks, nevertheless suggests that not all of the positive CARs can be due to market inefficiency.
Antineoplastic platinum agents are used in first-line treatment of ovarian cancer, but treatment failure frequently results from platinum drug resistance. Emerging observations suggest a role of ...reactive oxygen species (ROS) in the resistance of cancer drugs including platinum drugs. However, the molecular link between ROS and cellular survival pathway is poorly understood. Using quantitative high-throughput combinational screen (qHTCS) and genomic sequencing, we show that in platinum-resistant ovarian cancer elevated ROS levels sustain high level of IL-11 by stimulating FRA1-mediated IL-11 expression and increased IL-11 causes resistance to platinum drugs by constitutively activating JAK2-STAT5 via an autocrine mechanism. Inhibition of JAK2 by LY2784544 or IL-11 by anti-IL-11 antibody overcomes the platinum resistance in vitro or in vivo. Significantly, clinic studies also confirm the activated IL-11-JAK2 pathway in platinum-resistant ovarian cancer patients, which highly correlates with poor prognosis. These findings not only identify a novel ROS-IL-11-JAK2-mediated platinum resistance mechanism but also provide a new strategy for using LY2784544- or IL-11-mediated immunotherapy to treat platinum-resistant ovarian cancer.
The efficiency of bank branches Berger, Allen N; Leusner, John H; Mingo, John
IDEAS Working Paper Series from RePEc,
01/1994
Paper
Odprti dostop
Most of the early studies of bank efficiency focused on scale and product mix efficiency, or how close banks are to producing at the scale or product mix that minimizes costs per unit of output. ...Despite these past efforts, something rather important is missing from most of the analysis according to the authors - evaluation of bank branch efficiency. There has been very little empirical research on bank branch efficiency because branching data generally are confidential and not required by regulators. This paper tries to add to the limited information available about bank branch efficiency. It specifies the Fourier-Flexible nonparametric form for the cost function to characterize the efficient frontier for bank branches, the first application of the form in a frontier efficiency context. This form is applied to over 760 branches of a large U.S. commercial bank for three years of 1989, 1990, and 1991. The authors specify and compare models that employ two different concepts of bank costs and output - the intermediation approach and the production approach. The data set includes information on several types of transactions, allowing for more accurate efficiency estimation. The authors also have information on interbranch transactions, which allows them to account for the services that one branch provides for the customers of another branch. The study is a first of its kind from many perspectives in its methodological approaches, its conceptual approaches that compare and contrast the "intermediation" and "production" approaches to defining branch output, linking the relationship between branch efficiencies and bank efficiencies, the problems associated with bank mergers, and the effects of branch efficiency on price or branch offices to be sold. The empirical results are mutually consistent between the intermediation and production approaches and robust to other variations in specifications. The data suggest that most branches are considerably sm(This abstract was borrowed from another version of this item.)
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