Advances in Management and Applied Economics

Risk-taking and Efficiency of Banks for Emerging Eastern Asian Countries

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  • Abstract 

    To investigate the risk-taking impacts on bank efficiency in emerging Asian countries, we used a stochastic frontier approach technique. Empirical findings indicate more bank inefficiency in China than other countries, implying that management must not understand how to ensure their resources are being effectively utilized. The results show that credit risk plays more of an important role in banks’ efficiency than operating risk and market risk, and this is consistent with the general idea that banks have a better profitability when they are more stable. 

    JEL classification numbers: D24, G21, G34
    Key words: Risk-taking, Bank Efficiency, Stochastic Frontier Approach