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The effect of organizational structure on efficiency: Evidence from the Spanish insurance industry

Title
The effect of organizational structure on efficiency: Evidence from the Spanish insurance industry
Authors
Cummins J.D.Rubio-Misas M.Zi H.
Ewha Authors
지홍민
SCOPUS Author ID
지홍민scopus
Issue Date
2004
Journal Title
Journal of Banking and Finance
ISSN
0378-4266JCR Link
Citation
vol. 28, no. 12, pp. 3113 - 3150
Indexed
SSCI; SCOPUS scopus
Abstract
This paper provides new information on the effects of organizational structure on efficiency by analyzing Spanish stock and mutual insurers over the period 1989-1997. We test the efficient structure hypothesis, which predicts that the market will sort organizational forms into market segments where they have comparative advantages, and the expense preference hypothesis, which predicts that mutuals will be less efficient than stocks. Technical, cost, and revenue frontiers are estimated using data envelopment analysis. The results indicate that stocks and mutuals are operating on separate production, cost, and revenue frontiers and thus represent distinct technologies. In cost and revenue efficiency, stocks of all sizes dominate mutuals in the production of stock output vectors, and smaller mutuals dominate stocks in the production of mutual output vectors. Larger mutuals are neither dominated by nor dominant over stocks in the cost and revenue comparisons. Thus, large mutuals appear to be vulnerable to competition from stock insurers in Spain. Overall, the results are consistent with the efficient structure hypothesis but are generally not consistent with the expense preference hypothesis. © 2004 Elsevier B.V. All rights reserved.
DOI
10.1016/j.jbankfin.2004.05.004
Appears in Collections:
경영대학 > 경영학전공 > Journal papers
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