Table 5 Cantonal banks: instrumenting size by local population
From: Scale effects on efficiency and profitability in the Swiss banking sector
(1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | |
|---|---|---|---|---|---|---|---|---|
CIR | CIR | CIR | CIR | ROA | ROA | ROA | ROA | |
A. Pre-crisis period (1997–2006) | ||||||||
Log(Total Assets) | 0.953 | 1.972 | \(-\)1.438 | \(-\)1.036 | 0.042 | 0.027 | 0.060* | 0.064* |
(1.299) | (1.253) | (1.271) | (1.370) | (0.025) | (0.024) | (0.034) | (0.033) | |
Pop. share w/tert. educ. | \(-\)13.934 | \(-\)23.466 | \(-\)23.182 | \(-\)24.962 | \(-\)0.297 | \(-\)0.160 | \(-\)0.510 | \(-\)0.530 |
(35.802) | (33.769) | (20.006) | (20.575) | (0.542) | (0.526) | (0.323) | (0.337) | |
Method | OLS | IV | OLS | IV | OLS | IV | OLS | IV |
Controls? | No | No | Yes | Yes | No | No | Yes | Yes |
Year FE? | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
Nr. banks | 24 | 24 | 24 | 24 | 24 | 24 | 24 | 24 |
N | 240 | 240 | 240 | 240 | 240 | 240 | 240 | 240 |
Adj. R2 | 0.04 | 0.48 | 0.29 | 0.49 | ||||
First-stage F-stat | 127.6 | 74.6 | 127.6 | 74.6 |
(1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | |
|---|---|---|---|---|---|---|---|---|
CIR | CIR | CIR | CIR | ROA | ROA | ROA | ROA | |
B. Post-crisis period (2010–2019) | ||||||||
Log(Total Assets) | \(-\)0.390 | 1.224 | \(-\)3.745*** | \(-\)3.286** | 0.078*** | 0.062** | 0.111*** | 0.091*** |
(1.690) | (1.566) | (1.291) | (1.503) | (0.027) | (0.023) | (0.021) | (0.023) | |
Pop. share w/tert. educ. | 9.370 | \(-\)5.145 | \(-\)5.958 | \(-\)7.833 | \(-\)0.595 | \(-\)0.445 | \(-\)0.394* | \(-\)0.312 |
(23.904) | (22.727) | (11.422) | (11.840) | (0.358) | (0.340) | (0.208) | (0.199) | |
Method | OLS | IV | OLS | IV | OLS | IV | OLS | IV |
Controls? | No | No | Yes | Yes | No | No | Yes | Yes |
Year FE? | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
Nr. banks | 24 | 24 | 24 | 24 | 24 | 24 | 24 | 24 |
N | 240 | 240 | 240 | 240 | 240 | 240 | 240 | 240 |
Adj. R2 | \(-\)0.04 | 0.55 | 0.22 | 0.59 | ||||
First-stage F-stat | 110.6 | 342.2 | 110.6 | 342.2 |
(1) | (2) | (3) | (4) | |||||
|---|---|---|---|---|---|---|---|---|
1997–2006 | 2010–2019 | |||||||
C. First-stage regressions for IV specifications (dep. var.: Log(Total Assets)) | ||||||||
Log(Canton Population in 1995) | 0.699*** | 0.668*** | 0.689*** | 1.046*** | ||||
(0.062) | (0.077) | (0.066) | (0.057) | |||||
Pop. share w/tert. educ. | 3.872*** | 3.258** | 3.599** | 2.153*** | ||||
(1.031) | (1.181) | (1.379) | (0.673) | |||||
Controls? | No | Yes | No | Yes | ||||
Year FE? | Yes | Yes | Yes | Yes | ||||
Nr. banks | 24 | 24 | 24 | 24 | ||||
N | 240 | 240 | 240 | 240 | ||||
Adj. R2 | 0.87 | 0.92 | 0.86 | 0.96 | ||||