Pricing,operating efficiency,and profitability among large commercial banks

This study uses statistical cost accounting techniques to examine the relationship between bank profitability and two dimensions of operating performance — pricing and operating efficiency. The traditional statistical cost accounting model, which relates a firm's income to its asset and liability mix, is expanded to account for differences in market structure, regional demand and supply conditions, and macroeconomics factors. The study focuses on large (above $500 million in domestic deposits) banks, comparing a sample of relatively profitable banks against a matched group of much less profitable banks over the period 1970–1977. After allowing for regional supply and demand factors, the high and low-profit banks are estimated to earn equal market rates of return on individual assets and liabilities. There is virtually no evidence that differential prices are an important discriminator between the two bank groups. Some evidence is found that the high-earnings banks experience lower operating costs on some liabilities, but the opposite is true with respect to selected asset items. After taxes are taken into account, however, any such cost differentials virtually disappear. Overall, there is no compelling evidence that high-profit banks are characterized by greater operating efficiency than their low-earnings counterparts. This finding is consistent with the view that over time, and especially among relatively large banks, information flows and competitive pressures act to reduce operating efficiency differences that may appear in the short run.     

The competition for deposits and the impact of monetary policy

Financial intermediation in Britain can be said to have reached maturity before the war, since when the growth of banks has been critically a question of market share. Until the shift in monetary policy away from direct restriction of bank lending that began about nine years ago, credit restriction added to other factors, like taxation and the bank cartel, limiting the ability of the banks to compete. The author argues that an open-market policy directed toward money supply control need not discriminate against banks. However, the re-introduction of bank lending restrictions through the use of Special Deposits and, even more so, through the use of Supplementary Special Deposits has worked to favour non-bank deposit intermediaries. The distortions caused by the Supplementary Special Deposits not only discriminate against the banks; they are also likely to undermine the use of monetary policy itself. What are required are government policies, especially with regard to the size of the public sector borrowing requi rement, that make possible the goal of a non-discriminatory open-market policy, without the need for direct controls on lending by financial institutions.     

IT professionals and organisational ascendancy: theory and empirical critique

IT expertise cannot be viewed as a decisive asset in organisational tournaments. Survey findings suggest IT competence is associated with severe handicaps in power contests between professional/managerial strata. At least for the present, there are strongly negative implications for hypotheses of organisational ascendancy for IT professionals or for their successful achievement of a collective mobility project.     

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Asymmetric preference formation in willingness to pay estimates in discrete choice models

Individuals when faced with choices amongst a number of alternatives often adopt a variety of processing rules, ranging from simple linear to complex non-linear treatment of each attribute defining the offer of each alternative. In this paper we investigate the presence of asymmetry in preferences to test for reference effects and differential willingness to pay according to whether we are valuing gains or losses. The findings offer clear evidence of an asymmetrical response to increases and decreases in attributes when compared to the corresponding values for a reference alternative, where the degree of asymmetry varies across attributes and population segments.