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Exploring Effectiveness and Efficiency of Banks in Switzerland

Author

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  • Said Jaouadi
  • Ilhem Zorgui

Abstract

The paper attempted to investigate the effectiveness and the efficiency of the Swiss banking sector, through the elaboration of solid econometric approaches focusing on solid scientific methodologies: effectiveness and efficiency. The two concepts make up a widespread in econometric literature, primarily to account for the performance determinants and optimal operating. In the empirical investigation, we used data covering many financial and macroeconomic data about the Swiss banks sector in overall, focused on the period 1988 to 2011. We proceeded to build a reliable econometric model, according with the bulk of papers interested in the issue of the determinants of profitability of banks. The empirical investigation described the acting of these financial institutions by adopting rigorous econometric methodology. Thus, the paper shed the light on the determinants of the profitability of Swiss banks, provides obvious explanation and bear out several conclusions in favour of the Swiss banks. In fact, the present paper underlines that banks in Switzerland are acting with efficiency and thus, it consolidates the reputation of the Swiss banking sector in the world.

Suggested Citation

  • Said Jaouadi & Ilhem Zorgui, 2014. "Exploring Effectiveness and Efficiency of Banks in Switzerland," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(4), pages 313-325, April.
    • Handle: RePEc:hur:ijarbs:v:4:y:2014:i:4:p:313-325
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    References listed on IDEAS

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    1. Piergiorgio Alessandri & Benjamin D. Nelson, 2015. "Simple Banking: Profitability and the Yield Curve," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 47(1), pages 143-175, February.
    2. John H. Boyd & Bruce A. Champ, 2006. "Inflation, banking, and economic growth," Economic Commentary, Federal Reserve Bank of Cleveland, issue May.
    3. Bourke, Philip, 1989. "Concentration and other determinants of bank profitability in Europe, North America and Australia," Journal of Banking & Finance, Elsevier, vol. 13(1), pages 65-79, March.
    4. Stavros Zenios & Andreas Soteriou, "undated". "Efficiency, Profitability and Quality of Banking Services," Center for Financial Institutions Working Papers 97-28, Wharton School Center for Financial Institutions, University of Pennsylvania.
    5. Valentina Flamini & Miss Liliana B Schumacher & Mr. Calvin A McDonald, 2009. "The Determinants of Commercial Bank Profitability in Sub-Saharan Africa," IMF Working Papers 2009/015, International Monetary Fund.
    6. Carol Ann Northcott, 2004. "Competition in Banking: A Review of the Literature," Staff Working Papers 04-24, Bank of Canada.
    7. Stefano Battilossi & Alfredo Gigliobianco & Giuseppe Marinelli & Sandra Natoli & Ivan Triglia, 2011. "L'efficienza allocativa del sistema bancario italiano, 1936-2010," Quaderni di storia economica (Economic History Working Papers) 25, Bank of Italy, Economic Research and International Relations Area.
    8. Beck , Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 2009. "Financial institutions and markets across countries and over time - data and analysis," Policy Research Working Paper Series 4943, The World Bank.
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    Cited by:

    1. Jaouadi, Said & Ben Jazia, Rachida & Ziedi, Azza, 2011. "Comparaison de l'efficacité et l'efficience des Banques islamiques et conventionnels: cas de l'Indonésie [Efficiency and effectiveness comparison of Islamic and conventional banking: case of Indone," MPRA Paper 57551, University Library of Munich, Germany, revised 24 Jul 2014.
    2. Hameed, Abdullah, 2014. "Exploring the determinants of Pakistani Islamic Bank: Empirical Survey," MPRA Paper 59789, University Library of Munich, Germany, revised 07 Nov 2014.
    3. Abd Hadi Mustaffa & Nur Zahidah Bahrudin & Zahariah Sahudin & Hasni Abdullah & Muhammad Ridzuan Abdul Aziz, 2023. "What have we Learned from Firm Efficiency Research for the Past 35 Years? A Bibliometric Analysis," Information Management and Business Review, AMH International, vol. 15(1), pages 216-227.

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    More about this item

    Keywords

    Bank; financial institutions; profitability; efficiency; effectiveness;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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