Enjoying the quiet life under deregulation? . Not quite

Most empirical studies in the banking literature assume that the alternative profit function is linearly homogeneous in input prices. We show that such an assumption is theoretically unwarranted and that its use may yield misleading results. We use Koetter et al. (Review of Economics and Statistics...

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Autores:
Restrepo-Tobón, Diego
Kumbhakar, Subal C.
Tipo de recurso:
Fecha de publicación:
2014
Institución:
Universidad EAFIT
Repositorio:
Repositorio EAFIT
Idioma:
eng
OAI Identifier:
oai:repository.eafit.edu.co:10784/7618
Acceso en línea:
http://hdl.handle.net/10784/7618
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spelling 20142015-11-06T21:15:36Z20142015-11-06T21:15:36Z0883-7252http://hdl.handle.net/10784/761810.1002/jae.2374Most empirical studies in the banking literature assume that the alternative profit function is linearly homogeneous in input prices. We show that such an assumption is theoretically unwarranted and that its use may yield misleading results. We use Koetter et al. (Review of Economics and Statistics 2012; 94(2): 462–480) as a benchmark to showcase how empirical results can be sensitive to the linear homogeneity assumption. Contrary to Koetter et al., we find a positive relation between market power and profit efficiency when this assumption is dropped. This relation is slightly weakened after the wave of intrastate and interstate deregulation but not enough to support the ‘quiet life’ hypothesis.engJohn Wiley & Sons, Ltd.Journal of Applied Economics. Vol. 29, (2), 2014, pp.333-343http://onlinelibrary.wiley.com/enhanced/doi/10.1002/jae.2374http://onlinelibrary.wiley.com/enhanced/doi/10.1002/jae.2374restrictedAccessCopyright © 2014 John Wiley & Sons, Ltd.Acceso restringidohttp://purl.org/coar/access_right/c_16ecJournal of Applied Economics. Vol. 29, (2), 2014, pp.333-343Enjoying the quiet life under deregulation? . Not quitearticleinfo:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionArtículopublishedVersionObra publicadahttp://purl.org/coar/version/c_970fb48d4fbd8a85http://purl.org/coar/resource_type/c_6501http://purl.org/coar/resource_type/c_2df8fbb1Economía y FinanzasFinanzasRestrepo-Tobón, Diego850c0717-765e-4a89-9903-f792dfcdc663-1Kumbhakar, Subal C.59b0432d-86f1-4393-88f5-3de205fcd81d-1EAFIT University, Medellín, ColombiaUniversity of New York, Binghamton, NY, USAGrupo de Investigación Finanzas y BancaJournal of Applied Economics292333343ORIGINAL23262082.pdf23262082.pdfapplication/pdf3146094https://repository.eafit.edu.co/bitstreams/861db0de-f636-48b2-8ef5-4206d7b4ae6f/downloadbff618b2f8961ac1c3aee6239cd3031eMD5110784/7618oai:repository.eafit.edu.co:10784/76182024-12-04 11:50:23.896open.accesshttps://repository.eafit.edu.coRepositorio Institucional Universidad EAFITrepositorio@eafit.edu.co
dc.title.eng.fl_str_mv Enjoying the quiet life under deregulation? . Not quite
title Enjoying the quiet life under deregulation? . Not quite
spellingShingle Enjoying the quiet life under deregulation? . Not quite
title_short Enjoying the quiet life under deregulation? . Not quite
title_full Enjoying the quiet life under deregulation? . Not quite
title_fullStr Enjoying the quiet life under deregulation? . Not quite
title_full_unstemmed Enjoying the quiet life under deregulation? . Not quite
title_sort Enjoying the quiet life under deregulation? . Not quite
dc.creator.fl_str_mv Restrepo-Tobón, Diego
Kumbhakar, Subal C.
dc.contributor.department.spa.fl_str_mv Economía y Finanzas
Finanzas
dc.contributor.author.spa.fl_str_mv Restrepo-Tobón, Diego
Kumbhakar, Subal C.
dc.contributor.affiliation.spa.fl_str_mv EAFIT University, Medellín, Colombia
University of New York, Binghamton, NY, USA
dc.contributor.program.spa.fl_str_mv Grupo de Investigación Finanzas y Banca
description Most empirical studies in the banking literature assume that the alternative profit function is linearly homogeneous in input prices. We show that such an assumption is theoretically unwarranted and that its use may yield misleading results. We use Koetter et al. (Review of Economics and Statistics 2012; 94(2): 462–480) as a benchmark to showcase how empirical results can be sensitive to the linear homogeneity assumption. Contrary to Koetter et al., we find a positive relation between market power and profit efficiency when this assumption is dropped. This relation is slightly weakened after the wave of intrastate and interstate deregulation but not enough to support the ‘quiet life’ hypothesis.
publishDate 2014
dc.date.issued.none.fl_str_mv 2014
dc.date.available.none.fl_str_mv 2015-11-06T21:15:36Z
dc.date.accessioned.none.fl_str_mv 2015-11-06T21:15:36Z
dc.date.none.fl_str_mv 2014
dc.type.eng.fl_str_mv article
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
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dc.type.local.spa.fl_str_mv Artículo
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dc.type.hasVersion.spa.fl_str_mv Obra publicada
status_str publishedVersion
dc.identifier.issn.none.fl_str_mv 0883-7252
dc.identifier.uri.none.fl_str_mv http://hdl.handle.net/10784/7618
dc.identifier.doi.none.fl_str_mv 10.1002/jae.2374
identifier_str_mv 0883-7252
10.1002/jae.2374
url http://hdl.handle.net/10784/7618
dc.language.iso.eng.fl_str_mv eng
language eng
dc.relation.ispartof.spa.fl_str_mv Journal of Applied Economics. Vol. 29, (2), 2014, pp.333-343
dc.relation.isversionof.none.fl_str_mv http://onlinelibrary.wiley.com/enhanced/doi/10.1002/jae.2374
dc.relation.uri.none.fl_str_mv http://onlinelibrary.wiley.com/enhanced/doi/10.1002/jae.2374
dc.rights.eng.fl_str_mv restrictedAccess
dc.rights.spa.fl_str_mv Copyright © 2014 John Wiley & Sons, Ltd.
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dc.rights.local.spa.fl_str_mv Acceso restringido
rights_invalid_str_mv restrictedAccess
Copyright © 2014 John Wiley & Sons, Ltd.
Acceso restringido
http://purl.org/coar/access_right/c_16ec
dc.publisher.eng.fl_str_mv John Wiley & Sons, Ltd.
dc.source.spa.fl_str_mv Journal of Applied Economics. Vol. 29, (2), 2014, pp.333-343
institution Universidad EAFIT
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