An empirical analysis on the bidirectional relationship of cost efficiency to the non-performing loans ratio and non-performing assets ratio of private domestic universal banks in the Philippines from the years 2002 to 2012
This paper focuses on testing the bidirectional relationship of cost efficiency and the non-performing loans ratio and non-performing assets ratio of private domestic universal banks in the Philippines from the years 2002 to 2012. In order to achieve this main objective, cost efficiency is estimated...
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| Main Authors: | , , , |
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| Format: | text |
| Language: | English |
| Published: |
Animo Repository
2013
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| Subjects: | |
| Online Access: | https://animorepository.dlsu.edu.ph/etd_bachelors/8571 |
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| Institution: | De La Salle University |
| Language: | English |
| Summary: | This paper focuses on testing the bidirectional relationship of cost efficiency and the non-performing loans ratio and non-performing assets ratio of private domestic universal banks in the Philippines from the years 2002 to 2012. In order to achieve this main objective, cost efficiency is estimated using a Stochastic Frontier Approach. The cost efficiency estimates obtained are afterwards used in a Simultaneous-Equation Tobit Model to determine if such relationship exists between cost efficiency, non-performing loans ratio and non-performing assets ratio, while including assets and age as the intervening variables. The results show that cost efficiency has a negative bidirectional relationship with non-performing loans ratio and non-performing assets ratio. The banks assets and age also significantly and negatively affect the 3 major variables. |
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