Although community banks hold a small proportion of U.S. banking assets and market share, they perform a crucial function in the U.S. economy by offering vital financial services to businesses and individuals in regions where major banks do not operate. Their diseconomies of scale put them at a competitive disadvantage in relation to large, national commercial banks when coping with digital transformation and regulatory requirements. These challenges mounted after the Great Recession. This research, with the usage of four key financial ratio categories and the implementation of logit regression, looks into how U.S. community banks evolved in the aftermath of the financial crisis, 2009-2017. It divides the entire sample period into two sub-sample periods, 2009-2012 and 2013-2017, and comparing community banks with their larger counterpart and within the community bank sector between the largest and the smallest asset size quartiles of the group. This study, to the best of our knowledge, represents the only known research at the time of publication that compares recovery of banks post the Great Recession based on whether they are community or non-community banks. It finds that community banks tended to recover more slowly in terms of the bottom line, ROE, after the Great Recession than large national banks. Additionally, community banks are more likely to carry even less capital than their national counterparts in the later time period as compared with the earlier time period. In contrast, banks with higher liquidity and greater operating efficiency are more associated with community banks than non-community banks. Also, the empirical findings posit that size matters, to a certain extent. That is, while size does not command an absolute advantage, a certain threshold may be necessary for a bank to stay competitive. This provides a rationale for mergers and acquisitions taking place in the banking sector.

PurposeThe purpose of this paper is to better understand the differences between community and non-community banks (CBs and Non-CBs) in the US. As the former have been declining in numbers, previous literature shows inherent differences between the business models of CBs and Non-CBs. This study attempts to gauge whether the impact of the reserve elimination during the Covid pandemic affected all banks similarly or whether community banks showed a differentiated response.Design/methodology/approachOn March 26, 2020, the Federal Reserve, at the onset of the Covid pandemic, altered the depository institution reserve requirement for the first time since 1992. This significant change in policy led to the reserve requirement reduction from 10% to 0%. This study examines the impact of the 2020 reserve elimination on all community banks and non-community banks in the US and finds that although the level of cash to assets increased at both types of depository institutions post reserve elimination, the impact on liquidity-focused ratios was more pervasive at community banks in the first quarter post the regulatory shift. Among community banks, the largest depository institutions experienced the biggest balance sheet adjustments in the June 2020 quarter that followed the change in Federal Reserve’s policy. Further, the study finds that over two-quarters post reserve elimination, the non-community banks demonstrate a greater increase in balance sheet liquidity. Past literature shows that community banks tend to carry more liquidity than non-community banks and small community banks tend to carry more liquidity than their larger counterparts. These previous findings may provide some explanation for the different speed documented in this study at which various banks have reacted to the reserve elimination in 2020.FindingsThis research finds that community banks had a quicker response to the change in the reserve elimination, showing quick increases across liquidity ratios. The larger non-community banks tended to play catch up, increasing their liquidity in the subsequent quarter. The study also shows that the changes in liquidity were initially driven by the segment of large community banks.Originality/valueThis study looks at how the reserve elimination enacted by the Federal Reserve in March 2020 in response to the Covid pandemic affected community versus non-community banks. Currently, as far as the authors know, there are no other published papers that look at this issue.

Community banks (CBs), despite holding a fairly small share of US banking assets, provide vital financial services to key segments of the economy and fill a void untapped by larger non-community banks (Non-CBs). They face challenges brought on by a fast-changing banking landscape, evolving technology, and ever-increasing regulatory burden. To remain competitive and to gain scale-related efficiencies, CBs have been seeking mergers even as greater institutional size causes a departure from the classical relationship-based business model. This study examines performance of US CBs and Non-CBs post the Great Recession to reveal how size of these institutions may affect their business operations. Empirical findings show that CBs, compared with their larger counterparts, tend to maintain higher levels of liquidity and lower levels of capital, and demonstrate a greater dependence on core deposits, confirming that CBs focus on deposit taking and soft information-based lending strategies. Furthermore, this study suggests that CBs should not be considered a homogenous group operating under a singular business model and cautions that regulatory dialectics aimed at the banking industry should not employ a one-size-fits-all approach.

This study examines the effects of executive gender diversity (EGD) and board gender diversity (BGD) on hotel financial performance in China based on the framework of the gender role, agency, and resource dependence theories. This research documents a negative effect of EGD and no significant effect of BGD on hotel financial performance. Moreover, the effect of EGD on hotel financial performance captured by return on equity (ROE) exhibits a U-shaped curve, with the profitability measure bottoming out at 21%. Our analysis also shows that a critical mass of 40% of EGD serves as a positive moderator for the EGD-ROE relationship. Beyond this point, gender-balanced executive groups evade negatives rooted in the gender role theory, enjoy positives drawn in the agency and resource dependence theories, and generate superior financial performance compared to all-male executive groups. This research offers important implications for human resource management and policy and regulation formulation.

The Shanghai-Hong Kong Stock Connect Program is a major development in China's overall financial reform effort, making its capital markets more accessible to global investment communities. The program utilizes the well-established Hong Kong Stock Exchange (HKEX) as a means to make Shanghai Stock Exchange (SSE) more accessible to foreign investors via the link to HKEX and in the process gives SSE more international exposure, though potentially at the expense of HKEX. We examine the impact of the Connect Program on the overall market volatility before and after two main dates: announcement date and launch date. The results show a positive market anticipation effect for both exchanges after the announcement, with their respective market risks declining significantly even before its official launch. However, the results also detect a negative effect in that both exchanges endured a significant surge in their respective volatility after program launch. Overall, the volatility risk of HKEX after launch was significantly below its pre-announcement level while SSE exhibited a completely opposite result.

The Shanghai-Hong Kong Stock Connect Program is a major development in Chinau0027s overall financial reform effort, making its capital markets more accessible to global investment communities. The program utilizes the well-established Hong Kong Stock Exchange (HKEX) as a means to make Shanghai Stock Exchange (SSE) more accessible to foreign investors via the link to HKEX and in the process gives SSE more international exposure, though potentially at the expense of HKEX. We examine the impact of the Connect Program on the overall market volatility before and after two main dates: announcement date and launch date. The results show a positive market anticipation effect for both exchanges after the announcement, with their respective market risks declining significantly even before its official launch. However, the results also detect a negative effect in that both exchanges endured a significant surge in their respective volatility after program launch. Overall, the volatility risk of HKEX after launch was significantly below its pre-announcement level while SSE exhibited a completely opposite result.

This study employs a paired difference approach to explore economies of scale in the credit union industry.Tests performed on aggregate credit union data strongly support the existence of scale economies.Empirical results suggest that the larger the credit union size is, the more efficiently it operates in terms of operating costs as a percentage of both total assets and operating income.Moreover, economies of scale evidenced in this research have become more pronounced post 2008 financial crisis, supporting the notion that they change over time.This documented enhancement in scale economies provides the rationale for the industry's proliferating consolidations via merger and acquisition activities.

The growing concern over environmental impacts caused by human activities has led to more calls to explore how one's environmental concern might affect travel-related decisions, evaluations, and behaviors. This study explores the moderating role of environmental concerns in the context of the established relationships between travel motivations, souvenir consumption, and travel experience. By clustering respondents into more and less environmentally concerned, the results show a significant difference in souvenir spending between the two groups among nature-motivated travelers, providing support for the moderating effect. For the complete sample, souvenir consumption has a lack of significant relationship with each of the three travel experience measures. However, in-depth between-group comparisons reveal that souvenir spending is significantly correlated with two of the three travel experience measures for the more environmentally concerned travelers; whereas none is significant for the less concerned group. Important implications and applications are provided for researchers and practitioners.

This study investigates whether state ownership significantly affects the performance of publicly traded Chinese airlines over the 1994–2011 period. The sample consists of six listed Chinese airlines, five on the Shanghai Stock Exchange and one on the Shenzhen Stock Exchange. Panel regression test results display persistently a U-shaped relationship between state ownership and firm performance for the airline industry. Furthermore, the evidenced convex relationship holds true for both market and operating performance measures. Thus, Chinese airlines with mixed ownership perform worse than their heavily privately held or majority state-owned peers. We attribute the poor performance experienced by mixed-controlled Chinese airlines to the grabbing hand exerted by their government shareholders and the excessive agency costs associated with severe conflicts of interest between their managers and dispersed shareholders. The findings affirm and highlight the importance of control and ownership unambiguity. Given the Chinese government's ongoing intention to privatize state-owned enterprises (SOEs) and the demonstrated U-shaped relationship, the optimal course of action for Chinese policy makers and Chinese airline executives to follow in order to further improve the performance of the industry is to expedite the privatization process for all state-owned airlines to break away from their state owners and to become fully privatized. This study enriches finance literature in at least two aspects. It serves as the first attempt to study the impact of state ownership on the performance of Chinese airlines. It also sheds additional light on the dynamic between state ownership and the performance of newly privatized SOEs while adopting multiple performance indicators and performing panel regression tests under three estimation methods.

While there is a general belief that top management plays an important role in the formation of a market-oriented culture, little empirical work has been done to examine such effect. The present study investigates the impact of management behavior on market orientation and collaboration between the management and the employees.

How various corporate cultural factors influence service quality is examined with a Taiwanese sample. The results indicate that companies that enjoy superior service quality possess the perceptions of being market-oriented, proactive, cooperative, democratic, and supportive, while their senior managers are perceived as supportive, accessible, friendly, passionate, accommodating, employee-centered, and democratic.

Recent research has shown that more market-oriented business units seem to enjoy a higher level of business performance. However, some have questioned the extent of such relationship and its diminished returns in relation to the strength of market orientation. Others have argued that marketing orientation adds to the cost of doing business. The present study attempts to provide some empirical evidence to examine such suspicion by testing the existence or the lack of a direct relationship. We examine the mediating role of service quality in the market orientation-performance linkage in the context of a homogeneous stock brokerage sector. A direct effect of market orientation on performance is compared with an indirect one to test the direct relationship. The results suggest that the effect of market orientation on business performance is largely attributed to the meditating role of service quality. A direct relationship is shown to be weak. It indicates that market orientation does not directly affect business performance and show how an intermediate variable, service quality, may mediate a market orientation-performance relationship. Important implications are provided for marketing practitioners and academic researchers. 

The effect of organization factors, such as leadership and market orientation, on corporate performance has been reported in the literature. While there has been consistent call on the examination of the role of organization factors on the formation of service quality perceptions and business performance, there has been scant theoretical and empirical research on how they interact. The present study investigates the impact of two organization factors, management leadership and market orientation on service quality and corporate performance, as measured by employee performance and business performance. The results indicate a significant effect of the organization factors on service quality and corporate performance measures.

This study investigates whether investors can effectively time the stock market in Taiwan. Test results uniformly favor a simple market timing trading strategy guided by discount rate changes. It outperforms both buy-and-hold and sector rotation strategies in the two subperiods as well as the entire sample period. Thus, this study supports market timing as a time-proven, useful investment tool and discount rate changes as an effective market timing indicator. In contrast, the research casts doubt on sector rotation as a viable market timing strategy, particularly once transaction costs and sector ETFs and mutual funds scarcity in Taiwan are factored in.

This study examines the relationship between corporate governance and cumulative abnormal returns (CARs) associated with target IPO banks surrounding M&A announcements. Empirical evidence suggests that a majority of the sample banks benefit from M&A announcements. It further shows that the CARs can be positively attributed to D&O insurance coverage and ownership while being negatively linked to board size. However, board independence fails to register any significance. In contrast, bank size, the control variable, persistently shows its significant, negative relationship with respect to target bank stock performance around M&A announcements. Thus, stockholders of small target banks fare better than those of large target banks in mergers and acquisitions.

This paper examines the underpricing of A-share initial public offerings (IPOs) in the Chinese tourism industry. Test results show that a very high level of underpricing exists. Specifically, the mean 1-day initial return for 25 tourism A-share IPOs covering the period 1993–2006 is 150%. Notably, underpricing still persists 1 year after the initial listing dates. Three information asymmetry-based hypotheses – winner's curse, ex ante uncertainty and signalling – are investigated as plausible causes for underpricing. The test results support both the winner's curse and the ex ante uncertainty hypotheses, suggesting that investors, despite the high level of underpricing, should expect to earn no more than a market-adjusted return in the amount of the risk-free rate. On the other hand, empirical evidence leads to the rejection of the signalling hypothesis. Therefore, investors in the Chinese tourism IPO market should not view underpricing as a signal for quality firms.

ABSTRACT This study, employing a logit regression model, not only illustrates the link between corporate governance and IPO bank acquisitions but also investigates the specific roles of key corporate governance characteristics on the likelihood of IPO bank acquisitions. Empirical evidence, after controlling for bank and IPO specific variables, shows that the equity based compensation plans for directors and officers (D&Os) significantly reduce the likelihood for IPO banks to be acquired. By contrast, D&O reputation and ownership significantly increase the probability of IPO bank acquisitions. Furthermore, this research suggests that larger banks are more likely to be acquired. Finally, based on its empirical findings, this study presents several compelling managerial implications. INTRODUCTION Failure of corporate governance of banks can create and have been responsible for gigantic financial losses in many countries, not only to corporate clients but also to individual investors, and therefore, to the society as a whole. According to Levine (2004), Banking crises dramatically advertise the enormous consequences of poor governance of banks. Bank crises have crippled economies, destabilized governments, and intensify poverty ... (p. 2) He also describes the unique characteristics of corporate governance in the banking sector. One major feature that distinguishes this sector is the deposit insurance, implicit through precedents of bank bailouts by central banks of national governments to protect their economies and explicit through the Federal Deposit Insurance Corporation (FDIC). The explicit insurance mechanism lessens depositors' incentive to monitor the bank's corporate governance, while it encourages managers to engage in risky investment decisions. This, in turn, raises the bank's risk. Indeed, Caruso and Palmucci (2007) argue that banks have an incentive to grow with the awareness that they will be supported by the Central Bank in case of problems (p. 3) This exact scenario has unfortunately been playing out en masse due to the fallout of the mortgage meltdown and credit crisis in the U.S. since 2007. Another important characteristic that separates the corporate governance in the banking sector from that of non-financial industries is the required regulatory approval for corporate control of banks. This restriction translates into hard-to -accomplish hostile bank takeovers. As a result, Prowse (1997) claims that . among the market mechanisms of corporate control (for banks), hostile takeovers are unimportant and other (friendly) mergers appear to be motivated largely for reasons other than disciplining current management ... (p. 511) Thus, firm value maximization, without a frictionless takeover market, no longer serves as the main incentive for bank managers to avoid being fired in a hostile takeover. Ample research shows that the board of directors plays an important role in the determination of firm value. A negative relationship between firm value and multiple directorships is documented in Loderer and Peyer (2001) and Jiraporn, Kim, and Davidson III (2007). This negative association can be attributed to the conflicts of interest and the time constraints associated with multiple directorships. Perry and Peyer (2003) also note that returns are more negative for firms with multiple directorships. Fich and Shivdasani (2006) show that when the majority of outside directors are busy, firm performance in terms of its market-to -book ratio suffers. Board size is also significantly linked to firm value (e.g. Yermack (1996) and Adams and Mehran (2002)). Given the influential power of the board of directors, corporate governance structure needs to be carefully studied in order to better align shareholder and manager interests. While extensive research has been conducted on the effectiveness of corporate governance in remedying the agency concern between shareholders and managers and aligning interests of the two groups, divergent results have emerged. …

This study investigates whether discount rate changes serve as an informative signal for investors to enter or exit the stock market. Based on the signal, a market timing strategy is formulated and its performance relative to a passive buy-and-hold strategy is tested with several performance evaluation methods. Empirical evidence derived from data of seven developed countries over more than 29 years is virtually invariant to the performance measures employed and uniformly supports the superiority of the market timing strategy. However, when the full study period is divided into pre-1994 and post-1993 sub-periods, the dominance of the market timing strategy essentially vanished over the latter sub-sample period. Thus, the tactic of basing investment strategy formulation on discount rate changes has turned unproductive in recent years. There is actually weak evidence over the post-1993 time period in favor of the passive buy-and-hold strategy.