2001 Fiscal Year Final Research Report Summary
An Empirical Analysis on Profitability for Shinkin Banks
| Project/Area Number |
12630104
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Public finance/Monetary economics
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| Research Institution | KYUSHU UNIVERSITY |
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Principal Investigator |
HORIE Yasuhiro Faculty of Economics, Kyushu University, Prof., 大学院・経済学研究院, 教授 (80209288)
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| Co-Investigator(Kenkyū-buntansha) |
KAWAMUKAI Hajime Kobe Univ. of Commerce, Department of Management Science, Ass. Prof., 商経学部, 助教授 (30234123)
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| Project Period (FY) |
2000 – 2001
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| Keywords | Regional banking system / Shinkin banks / Spatial statistical data / Empirical analysis / Local economic, marketing Environment |
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| Research Abstract |
We had investigated that local market environment of Shinkin Banks utilizing the grid statistical data of Population Census in 1995 and Establishment and Enterprise Census in 1996 by Ministry of Public Management. By specifying the longitude and latitude of branches of all types of banks in Japan, we have calculated the grid statistical system code of the location of branches and we have obtained the market environment of Shinkin banks based on the location of branches. By utilizing these grid statistical code, we have estimated local economic and market environment for each branches by counting the competitive bank branch numbers, the number of enterprise, the number of households and so on. Our research proposes a more precise method for the local economic conditions for Shinkin Banks instead of using data based on municipal area, which had been used in other studies.
We have obtained the following results based on the statistical databases we have built. Tracing from index of the ret
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urns of asset, main customers of the Shinkin Banks are different by their local economic conditions. Shinkin Banks, that spread over branches in the area, where a good amount of establishments and households exist, target larger enterprises in terms of their capital and vise versa. From the viewpoint of competitiveness, the competitive counterpart of Shinkin Banks differs from the local market conditions. The Shinkin Banks which locate their branches in urbanized or developed area, compete with upper class financial institutions, like local banks, however, those who spread their branches in rural or less populated area, compete with lower class financial institution like other Shinkin Banks or Credit Cooperatives.
From the Analysis of mergers in Shinkin Banks, in the late 1990's we could not find the clear difference between the leaders and followers in the case of mergers. However, in 2000's, we could show clear difference between the leaders and followers in mergers. The conditions of non performing loans are extremely different between the leaders and followers, while the local market and economic conditions are similar. This result indicates that reforming branch systems are very important for the profitability recovery through efficiently usage of resources and reduction of costs after mergers. Less
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