Naslov
Testing Out The "Quiet-Life" Hypothesis on Croatian Banking Sector

Autori
Huljak, Ivan

Vrsta, podvrsta i kategorija rada
Sažeci sa skupova, sažetak, ostalo

Izvornik
Book of Proceedings of the Economic and Social Development (ESD) International Conference, 5th Eastern European Economic and Social Development Conference on Social Responsibility / Jovancai Stakic, A., Kovsca, V., Bendekovic, J. (ur.). - Varaždin / Ana Jovancai Stakic, Vladimir Kovsca, Jadranka Bendekovic - Varaždin : VADEA, 2015, 45-45

Skup
The Economic and Social Development (ESD) International Conference, 5th Eastern European Economic and Social Development Conference on Social Responsibility

Mjesto i datum
Beograd, Srbija, 21.05.2015. - 22.05.2015

Vrsta sudjelovanja
Ostalo

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
Quiet life hypothesis ; Croatia ; banks

Sažetak
According to "Quiet-life" hypothesis (QLH) (Hicks 1935), market power can lead to lower cost efficiency, since it allows managers to enjoy a portion of the monopoly rents in the form of relaxed cost management. Although theoretically well founded, QLH empirical evidence is far from conclusive which represents one motive for this research. Additionally, better understanding of bank market power and efficiency relationship could result in social benefit as bank output is input for other sectors in economy. By testing out the QLH we extend the empirical work done so far on bank competition in Croatia on the sample of commercial banks (1994-2014). In the first step we use the Distribution free approach for the calculation of Competition efficiency frontier and X-efficiency. In the next step, we model bank efficiency with market power and the set of control variables. Negative relationship between market power and bank efficiency, which would prove QLH, is examined also for a sub-sample of banks and historical periods in Croatian banking sector. Although we provide empirical evidence generally supporting the QLH in Croatia, the connection between market power and bank efficiency is economically rather small. However, we believe that bank competition policy should definitely include “Quiet-life” considerations.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

Napomena
Ovaj rad je djelomično podržan od strane Hrvatske zaklade za znanost kao dio znanstvenog projekta „Statistical Modelling for Response to Crisis and Economic Growth in Western Balkan Countries“ (STRENGTHS) ; Broj projekta: THRZZ-IP-2013-11-9402. Voditeljica: prof. dr. sc. Ksenija Dumičić

POVEZANOST RADA