Para garantizarle una navegación por nuestra web segura y de calidad, le informamos que utilizamos Cookies. Si está de acuerdo clique ACEPTAR. Puede bloquear o eliminar las cookies instaladas en su equipo mediante la configuración de las opciones del navegador. Para más información consulte nuestra Política de Cookies
Instituto Valenciano de Investigaciones Económicas


Profit efficiency and earnings quality: Evidence from the Spanish banking industry
Prior, D., E. Tortosa-Ausina, M.P. García y M. Illueca
Fuente: Journal of Productivity Analysis

The analysis of efficiency and productivity in banking has received a great deal of attention for almost three decades now. However, most of the existing literature to date has not explicitly accounted for risk when measuring efficiency. We propose an analysis of profit efficiency taking into account how the inclusion of a variety of bank risk measures might bias efficiency scores. Our measures of risk are partly inspired by the literature on earnings management and earnings quality, considering that loan loss provisions, as a generally accepted proxy for risk, can be adjusted to manage earnings and regulatory capital. We also consider some variants of traditional models of profit efficiency where different regimes are stipulated so that financial institutions can be evaluated in different dimensions—i.e. prices, quantities, or prices and quantities simultaneously. We perform this analysis on the Spanish banking industry, whose institutions are deeply affected by the current international financial crisis, and where re-regulation is taking place. Our results can be explored in multiple dimensions but, in general, they indicate that the impact of earnings management on profit efficiency is of less magnitude than what might, a priori, be expected, and that the performance of savings banks has been generally worse than that of commercial banks. However, savings banks are adapting to the new regulatory scenario and rapidly catching up with commercial banks, especially in some dimensions of performance.

Cómo citar este artículo

Prior, D., E. Tortosa-Ausina, M.P. García y M. Illueca (2019). «Profit efficiency and earnings quality: Evidence from the Spanish banking industry». Journal of Productivity Analysis 51, n.º 2-3 (junio): 153-174.