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Securitization and bank efficiency

Securitization and bank efficiency

Chen, Zhizhen, Liu, Hong, Peng, Jin, Zhang, Haofei and Zhou, Mingming (2022) Securitization and bank efficiency. In: Ferris, Stephen P., Kose, John and Makhija, Anil K., (eds.) Empirical Research in Banking and Corporate Finance (Advances in Financial Economics. Advances in Financial Economics, 21 . Emerald Publishing Limited, Bingley, pp. 191-222. ISBN 978-1789733983; 978-1789733976 ISSN 1569-3732 (Print), 1569-3732 (Online) (doi:

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We examine whether loan securitization has an impact on bank efficiency. Using a sample of large US commercial banks from 2002 to 2012, we find that bank loan securitization has a significant and positive impact on bank efficiency, and this relationship is stronger for banks with higher capital ratios, higher default risk, and lower level of liquidity and diversification. Our results are robust to Heckman self-selection correction and difference-in-difference (DID) analysis. In addition, these results are found mainly in non-mortgage loan securitizations but not in mortgage loan securitizations. Finally, we show that loan sales also have a positive impact on bank efficiency.

Item Type: Book Section
Uncontrolled Keywords: securitization; bank efficiency; Heckman self-selection; difference-in-difference; liquidity and diversification; loan sales; financial crisis
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HF Commerce > HF5601 Accounting
H Social Sciences > HG Finance
Faculty / School / Research Centre / Research Group: Faculty of Business
Faculty of Business > Department of Accounting & Finance
Last Modified: 14 Sep 2022 15:24

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