Kazumine Kondo

Do ATMs influence bankprofitability in Japan

Holden and El-Bannany (2004) showed that Automated Teller Machines (ATMs) play an important role in increasing Return On Asset (ROA) in their analysis of banks in the United Kingdom. The present article investigates whether this conclusion also applies to Japanese banks. We found that ATMs do not have any influence on the ROA of Japanese banks; however, it was revealed that ATMs had positive effects on fees and commissions (income) from 2000 to 2003, and positive effects of ATMs on interest income were also seen recently. We conclude that in Japan, ATMs do not influence ROA, which includes the overall profits of bank transactions, but do contribute to particular businesses in that they can make the most of their abilities.

Effects of branch expansion on bank efficiency: evidence from Japanese regional banks

Purpose - – The purpose of this paper is to examine whether branch expansions have realized efficiency gains by focussing on regional banks in Japan. Design/methodology/approach - – The authors use a single-step estimation procedure, where both cost frontier parameters and inefficiency effects are addressed simultaneously, and examine the impact of expanding branch networks on bank performance. Findings - – The findings show that regional banks expanding their branch networks to certain levels exhibit lower cost inefficiencies. Robustness results are also obtained from the samples, excluding the regional banks located in urban regions. Originality/value - – The findings suggest that adequate levels of branch expansion have beneficial impacts for regional banks, although this result is contrary to the current region-based relationship banking policy promoted by Japan’s financial regulators.

Cross-prefecture expansion of regional banks in Japan and its effects on lending-based income

Abstract This paper examines whether Japanese regional banks entering the banking market in other prefectures, including neighboring prefectures, can increase their lending-based income. To stimulate local economies and support local small- and medium-sized enterprises, the current Japanese Government’s policies for regional banks require these banks to engage in region-based relationship banking practices. In this study, three lending-based income measures were used as dependent variables, and estimation was made using panel data from Japanese regional banks. As a result, it was determined that regional banks that enter markets in other prefectures experience positive effects in all three lending-based income measures. Moreover, it was determined that regional banks whose headquarters are located in non-urban areas derive greater benefit from their loan businesses upon entry into other prefectures, including neighboring prefectures, where economic activity is more vibrant than regional banks whose headquarters are located in urban areas.

The Governance Structures of Japanese Credit Associations and Their Objective Functions

ABSTRACT Although Japanese credit associations are non-profit cooperative financial institutions, they assume the same financial functions as regional banks that are stock companies and they could compete with each other in a regional market. On the other hand, the governance structures of credit associations tend to exhibit weaker discipline than those of regional banks, and, for this reason, the financial performances of credit associations and regional banks might differ. In this article, we empirically investigated whether the objective functions of credit associations are different from those of regional banks considering their different governance structures. As a result, although significant differences of profitability of these two types of institutions were not detected, it was demonstrated that credit associations can capture a greater share of deposits than regional banks and the former are more conservative in risk taking than the latter. From these, there is a possibility that Japanese credit associations have different objective functions from regional banks.

Does Branch Network Size Influence Positively the Management Performance of Japanese Regional Banks

ABSTRACT This article investigates whether branch network expansions by Japanese regional banks influence their management performances positively at a time when management environments surrounding regional financial institutions have become increasingly severe due to the population decreases and shrinkage of regional economies. Specifically, the effects of numbers of regional bank branches on their credit businesses and profits are empirically examined. The results indicated that regional banks with more branches can increase their loans and bills discounted as well as their small and mid-sized enterprises loans and bills discounted. Thus, establishing more branches is effective in increasing the total sum of loans and bills discounted by each bank because regional banks with many branches can make contact with more customers. On the other hand, return on assets and return on equity of regional banks with more branches were found to be lower. Therefore, regarding the cost performance of regional banks, establishing too many branches and maintaining branch networks that are too large can have negative effects on regional banks.

Inclusive Growth in Iran's Provinces (2004 -2015)

This paper aims to focus on inclusive growth and its impact on multidimensional poverty and inequality in Irans provinces on the basis of social mobility index. The results suggest, that although the multi-dimensional poverty has decreased, participation of active labor force has a decisive role in inclusive growth and reduction of absolute multi-dimensional poverty of the provinces. But labor participation has been accompanied by inequality of income, which indicates that the opportunity for economic growth has been unevenly distributed, as higher income deciles have more benefits. Income inequality has moderated the positive and significant effect of GDP growth on its inclusiveness. Inflation also has a negative and significant effect on the inclusive growth of the provinces. The research findings indicate that the economic and financial policies, including the ratio of bank credit to GDP and government social expenditures, have a positive and significant effect on the acceleration of inclusive growth and have been able to generate inclusive, albeit unsustainable growth in the provinces. This inclusive growth has led to a reduction in poverty and inequality. However because of its volatility and instability, it has no significant impact on poverty and inequality and did not directly reduce poverty and inequality in the provinces.