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    Green banking : an exploration from the perspectives of banks, and retail bank customers : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Banking at Massey University, Manawatu Campus, School of Economics and Finance, New Zealand. EMBARGOED UNTIL JULY 2027.
    (Massey University, 2024-11-11) Kalu Kapuge Dona, Lilani Randika Kapuge
    This study explores green banking adoption from the perspectives of banks, and retail bank customers. Our aim is to contribute to banks’ adoption of green banking. This is achieved by examining banks’ green practices and proposing a constructivist framework for banks to transform from conventional banking into green banking. As banks are driven by a profit motive, if banks’ environmental performance positively connects with attaining their profitability objectives, there may be a motivation to apply green banking practices. In Essay One, we examine the impact of banks’ green performance and disclosures on their financial, market, and risk performance. We employ Bloomberg’s environmental disclosure scores and Refinitiv’s environmental performance scores as proxies to measure banks’ green performance and disclosures. As an addition to ESG literature, we use Yale’s Environmental Performance Index (EPI) to examine the extent to which the home country’s environmental performance moderates the links between the impact of banks’ environmental performance and disclosures on their financial, market and risk performance. Data was drawn from 189 of the world’s largest banks for the period 2009 to 2019, and the analysis incorporates two-step system GMM models. To check the robustness of our results, we removed banks that are major financiers of fossil fuels and EU banks from the main sample. We find no evidence to support Bloomberg’s environmental disclosure scores or Refinitiv’s environmental performance scores impacting banks’ financial, market and risk performance. In addition, EPI does not moderate the links between the impact of banks’ environmental performance and disclosures on their financial, market and risk performance. The findings confirm that environmental performance and environmental disclosures do not matter to big banking players’ prosperity. Overall, this study establishes the need for a commonly agreed banking-industry-oriented environmental rating scale to measure banks’ green performance correctly to avoid misleading green-conscious stakeholders and identify banks’ true green efforts. In Essay Two, in response to the absence of an agreed or standard performance measurement mechanism for green banking, we develop a green banking scorecard (GBS) from a new perspective. First, we use the updated version of the Planetary Boundaries Theory (PBT) to broaden the green banking measurement scale. Second, we employ a Fossil Fuel Index (FI) to assess banks’ true commitments towards green banking, because banks are often criticised as major financiers of fossil fuels. Third, as a new addition to banks’ green performance measurement, we use Yale’s Environmental Performance Index (EPI) which brings international differences in measuring banks’ green performance into a common platform. We apply the GBS to 37 of the world's largest banks to measure their green performance. We find that European banks achieve higher green banking scores compared to Asian and American banks. In Essay Three, following Stakeholders' Theory, stakeholders’ positive behavioural change towards green banking is essential for banks to adopt green banking. Employing Behavioural Response Theory (BRT), we examined retail bank customers’ intention to adopt green banking in New Zealand using 254 online survey responses. To extend this study, we examine whether retail bank customers’ environmental knowledge moderates the association between attitude towards green banking and intention to adopt green banking. The study finds retail bank customers prefer green banking although some of them do not yet intend to adopt green banking. The findings confirm that environmental knowledge has a weak negative moderating effect on the association between attitude towards green banking and intention to adopt green banking. The responses from this study indicate there are specific factors that affect and limit retail bank customers’ intentions to adopt green banking. In summary, this study concludes environmental disclosure scores, or environmental performance scores do not impact banks’ financial, market and risk performance. We proposed a green banking scorecard (GBS) from a new perspective to measure banks’ green performance and we find that European banks achieve higher green banking scores compared to Asian and American banks. Finally, the study finds retail bank customers also prefer green banking and intend to adopt green banking.
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    Corporate governance of banks in Vietnam and their roles on banks’ risk-taking and efficiency : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Banking Studies at Massey University, Manawatu Campus, New Zealand
    (Massey University, 2020) Tran, Thi Minh Trang
    This thesis comprises three essays that investigate the effectiveness of corporate governance mechanisms associated with recent Vietnamese banking reform on Vietnamese banks’ risk-taking and efficiency. The thesis uses a hand-collected dataset on accounting and corporate governance data from annual statements published by commercial banks during the 2006-2016 period. The first essay examines the role of foreign directors on bank risk-taking, using data from 32 commercial banks in Vietnam in the 2006-2016 period. Our findings suggest foreign directors increased bank risk-taking after 2011. The relationship is robust after taking account of potential endogeneity problems and different measures of bank risk-taking. The explanation is that foreign directors are motivated to encourage management to increase risk-taking to earn short-term returns when there is uncertainty in macroeconomic conditions. Other characteristics such as female directors, family related directors, and board size on risk-taking are also discussed. There is no evidence showing that foreign directors are more or less risk-averse in listed banks vs unlisted banks or in state-owned banks vs private banks. The second essay investigates the impact of female directors on boards on bank efficiency, using data from 32 commercial banks, covering the 2006-2016 period. The relationship is estimated by employing one-stage stochastic frontier analysis, using the Battese and Coelli (1995) (BC95) approach. The two-stage distributional free approach proposed by Cornwell, Schmidt, and Sickles (1990) (CS90) is employed as a robustness check. The result shows a robust relationship between female directors and cost-efficiency. This suggests that female directors are associated with a decrease in cost efficiency. A possible explanation is that female directors are less experienced in management than male directors and have less access to environmental resources that benefit firms. The third essay examines the impact of mergers and acquisitions (M&As) on bank efficiency, using a balanced panel dataset from 22 commercial banks over the 2008-2016 period. The study employs a two-stage DEA window analysis. Our findings suggest that there is no significant relationship between M&As and bank efficiency, which is not surprising given the small number of M&A events so far. However, there is evidence that Vietnamese banks experienced less improvement in efficiency after M&As. A possible explanation for this is that the M&As might not be not driven by profit-maximization, but by the government encouragement to rescue weak banks. Also, the combined entities need to spend additional resources on resolving the bad debts transferred from the weak, targeted banks.
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    Impact of the global financial crisis 2008 on bank efficiency : an experience of the Anglo-Saxon countries : a thesis presented in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Banking Studies at Massey University, Manawatu Campus, New Zealand
    (Massey University, 2020) U-Din, Salah
    This thesis investigates the differences in the impact of the Global Financial Crisis 2008 (GFC) on the banking sectors of Australia, Canada, New Zealand, UK, and the United States from 2003 to 2015. The selected banking sectors are based on a common Anglo-Saxon banking system and belong to developed economies for which the GFC showed varying degrees of severity. The measures of cost, profit, alternative profit, and shareholder value efficiency are used to assess the impact of the GFC on bank efficiency of the five countries. The aim of this study is achieved with four major objectives: first, the theoretical analysis of the varying impact of the GFC on the banking sectors of the developed and integrated economies is confirmed with econometric analyses; second, the impact of different banking environment variables on bank efficiency is assessed to identify the reasons behind the variation in the impact of the GFC on the efficiency of the selected banking sectors; third, this study compares the results for the U.S. banking sector with other developed economies using a common frontier; fourth, it assesses the change in banking risk, structure, and shareholder value during the study period. A common frontier is drawn with a one-stage Stochastic Frontier Analysis (SFA) model among the selected group of relatively homogenous economies, and remaining economic variations are controlled with banking environment variables. A group of 29 large and systemically important banks is selected from all five countries for this study. The empirical results confirm the superiority of the Australian and Canadian banking sectors in cost efficiency compared to New Zealand, UK, and U.S. sectors from 2003 to 2015. Profit efficiency of the U.S. and British banks is most negatively impacted by the GFC, and the banking sectors of Australia, Canada, and New Zealand are among the least impacted. A significant impact of the GFC is observed during 2008 and 2009, and the selected banking sectors are not able to achieve pre-GFC efficiency levels in the post-GFC period. Cost-efficient banking is found to be more resilient, and the level of bank liquidity and equity play a vital role in the stability of the banks during the crisis period. The level of risk has declined over the study period, however, the negative influence of the risk on bank efficiency is reported. A higher ratio of lending assets provided earning stability for banks during the crisis period. Bank size, market concentration, and population density of chosen economies are not favorable for bank efficiency. Shareholder value was also impacted by the GFC during the same period and was found to be closely associated with the profit efficiencies of the banks during the study period. The trend and scores of the selected four efficiency models are consistent over the study period and found to be robust to various alternative tests. The findings of this thesis support the enhanced standards of the bank liquidity and equity, however, we recommend some regulatory initiatives to lower regulatory cost, bank size, and market concentration of selected banking sectors. A few limitations of the thesis are identified, and some guidelines for future research are also provided.
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    Switching determinants in subscription service markets : banking and electricity in New Zealand : a thesis presented in partial fulfilment of the requirements of the degree Master of Business Studies at Massey University, New Zealand
    (Massey University, 2004) MacRae, Murray Stuart
    This study examines the important role switching costs play in consumer loyalty to service providers. Banking and residential electricity consumers were studied in New Zealand using the framework developed by Burnham, Frels & Mahajan (2003). An attempt was made to replicate their measurement model using Burnham et al.'s eight first order constructs. An acceptable fit to the data was achieved, however, their instrument's scale items did not load as predicted indicating limited convergent and discriminant validity. In replicating Burnham et al.'s three factor second order model, of their three factors - procedural, financial and relational - only relational costs proved significant in influencing a consumer's intention to stay with their current service provider. A relationship between satisfaction with a service and a greater intention to stay with that service was confirmed. Possible explanations for the poor performance of the Burnham et al. structural model might be that their measurement model violates some basic rules for scale development. The lack of validity of some scales leads to speculation that the significant results reported by Burnham et al. were the result of fortuitous fit to their USA data. The value of a theory is in its general applicability to situations outside its original context. While the Burnham et al. (2003) theory may have been intuitively sound, this attempt to operationalise their model was hindered by a measurement instrument which lacked convergence, discriminance and reliability. The Burnham et al. model demonstrated in this replication an adequate fit to the data, but goodness-of-fit alone does not indicate a structurally sound model. It also requires validity. The findings of this thesis are that their model may require modification to some scales before it will be universally useful. Keywords: Customer retention, confirmatory factor analysis, structural equation modelling, switching costs, loyalty, satisfaction, switching, defection, subscription markets, services.
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    A cross-cultural study of country and bank selection by Asian international students : a New Zealand perspective : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Business and Administration at Massey University, Palmerston North, New Zealand
    (Massey University, 2017) Chin, Arthur In Sing
    Internationalisation of education and increasing wealth among a growing middle class population in North Asia are two reasons for a growing number of students travelling overseas for their tertiary education. New Zealand is a popular destination-of-choice, where income derived from international education exceeds NZ$2bn annually. Ownership of a New Zealand bank account is a mandatory requirement for international students. This thesis assumes there is a service gap in banks’ value proposition to international tertiary students as a result of differences in retail patronage expectations. Bank selection is the domain focus of this research, which examines the questions of “when do students consider bank selection questions when travelling overseas for their tertiary education?” and “what are the influencing factors behind bank selection?”. The research demographic comprised students from South Korea, India, and the Greater China countries of China, Taiwan and Hong Kong. Prior research on bank selection is examined. Overall, the review identified limited research on the consumer segment, and on Asian international students in particular. Consequently, there is an identifiable gap between academic research and bank practice. A qualitative approach using focus groups helped identify topics and vocabulary appropriate to the research. Findings from the focus group discussions led to the development of an online questionnaire which was eventually completed by 582 international tertiary students currently studying in New Zealand. While findings showed that the majority of international students are satisfied with their main bank relationships, services offered by New Zealand banks do not fully address what international students want from their banking relationship. Further, convenience, low service fees and the adoption of mobile banking applications are three factors that appeal to the research demographic, and findings also call for banking officers to be familiar with Asian cultural nuances, where cultural familiarity has precedence over Asian language proficiency. The implications for university international student recruiters and bank marketers include familiarity with when international students decide to travel overseas for their tertiary education and the influencing reasons why they choose to study in New Zealand; when and how Asian international students identify bank relationships in New Zealand; and, recognising the critical success factors to developing deep and meaningful relationships with the Asian international tertiary student segment.
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    What do New Zealand bank customers understand about the risks of dealing with foreign and New Zealand owned retail banks? : a thesis presented in partial fulfilment of the requirements for the degree of Master of Management in Banking at Massey University
    (Massey University, 2005) Wood, Jacob G
    This research has sought to develop an in-depth awareness of what New Zealand banking customers understand about the potential risks of dealing with foreign-owned retail banks, relative to those that are New Zealand owned. For the purpose of this study, a mail-out questionnaire was developed in joint collaboration with Xiaojie Zhuang, a Master's research student in the Department of Finance, Banking and Property at Massey University (Palmerston North). Using assistance by way of a Reserve Bank of New Zealand grant, the questionnaire was distributed to 2250 randomly selected persons throughout New Zealand. Overall, the key results showed that most respondents have a reasonable understanding of which institutions are foreign or locally owned. It also found that the most important risks facing banks at present are foreign exchange risk (a bank's inability to hedge its foreign currency exposure) and credit risk, (a bank's inability to provide sound grounds for lending). It found that banking ownership, whether it is foreign or local, does not change the way in which New Zealand banking customers perceive these risks. This study found that the majority of respondents felt that, while foreign-owned banks may reduce market profitability, they do not detract from the stability of the New Zealand financial system.
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    The linkage between banking sector, economic fundamentals and the Indonesian currency crisis : a thesis presented in partial fulfillment of the requirements for the degree of Master of Applied Economics at Massey University
    (Massey University, 2000) Nugroho, Agus Eko
    This study shows that a link exists between the weaknesses in the banking sector, economic fundamentals and the rapid depreciation of the rupiah exchange rate. The weakness in the banking sector was strongly associated with the number of insolvent banks and the rise in foreign liabilities of the banking sector in the pre-crisis period. The increase in the ratio of trade deficit to GDP and the rise in the domestic and foreign interest rate differential largely contributed to the deterioration in the Indonesian economic fundamentals during 1990-1998. Somewhat surprisingly, the interaction variable between the ratio of foreign reserves to imports and the foreign and domestic interest rate is statistically significant. This finding implies that the impact of the change in the ratio of foreign reserves to imports on the change in the rupiah exchange rate is moderated by the magnitude of the foreign and domestic interest rate differential. Similarly, the change in the rupiah exchange rate resulting from a change in the foreign and domestic interest rate differential is moderated by the value of the ratio of foreign reserves to imports. Finally, the dummy variable used to capture the effect of a change in the policy of exchange rate regime shows that the abandonment of the pegged exchange rate regime led to the rapid depreciation of the rupiah exchange rate.
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    Is participatory governance of relevance to corporate governance? : a thesis presented in partial fulfilment of the requirements for the degree of Master of Philosophy in Development Studies at Massey University
    (Massey University, 2008) Penny, Kim
    The Grameen Bank, offering neighbourhood-banking services to over five million of the world's most neglected and poor human beings, is perhaps the world's most successful academic-action research project. Now with over five million members, monthly loan dispersal of nearly US$50 million, and constituting over 1% of the Bangladesh GDP. the Grameen Bank started with $25 from Economics Professor Muhammad Yunus' own pocket. There is now no shortage of literature on governments, industries, corporations, organisations and individuals grappling with what governance is and what it means on a day-to-day basis. As the corporate world comes to terms with stakeholder and shareholder involvement in a manner that sometimes appears to be largely rhetorical, in an apparent parallel universe, the discourse of participatory governance is becoming increasingly important for those working in the field of bilateral aid and Non-Government Development Organisations (NGOs). Despite the lack of engagement between those working in these two fields, there appears to be a degree of overlap between these two discourses. It is this possible overlap that underpins the concerns of this thesis. The thesis thus addresses the question: Are there lessons from participatory governance of relevance to the corporate world? If so. what are they? By researching the structure and workings of the governance of the Grameen Bank, it was found that a corporation can prosper using participatory governance, a governance style given the name of participatory corporate governance. This model can assist to create an institutional duality that balances social purpose with the need for positive financial outcomes, further findings show that despite the lack of engagement between the discourses of participatory and corporate governance there does appear to be an overlap in the 'best practice' requirements of each.
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    Efficiency of the banking system in Vietnam under financial liberalization : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Banking Studies at Massey University, Manawatu Campus, New Zealand
    (Massey University, 2015) Ngo, Dang Thanh
    The thesis reviews the (triangular) relationship between financial liberalization, economic growth, and banking development. It points out the causality effect where financial liberalization could improve the efficiency of the banking sector, but on the other hand, it also could lead to instability in the banking system. The recent Global Financial Crisis raised questions as to how and at what level financial liberalization could be done so that for banking development, improvements are achieved but instabilities are avoided. The thesis answers these questions employing a new sample (the Vietnamese banking system), covering a long period (1990-2010), and consistently applying different approaches and models. Three different approaches are used, namely ratio analysis, stochastic frontier analysis (SFA), and data envelopment analysis (DEA). Our findings suggest that the performance of the Vietnamese banking system generally improved during 1990-2002, worsened during 2003-2008, and recovered in 2009-2010. However, there was no statistical association between this performance and the regional or global financial crises in 1997 and 2007/08. Although future studies are needed (since our sample was small and thus, the results may not be accurate), there was evidence that the state-owned commercial banks were less efficient than the joint-stock commercial banks and hence, equitization of the state-owned commercial banks should be speeded up in order to transform their ownership, reducing their size, and improving their performance. There are consistencies between these approaches in terms of defining the efficiency scores, trends, and best and worst performers. Our findings also suggested that the timetrend- DEA, as well as the Fisher Index-DEA models, could be an alternative to the panel- DEA and Malmquist Index-DEA models since they could provide additional information on the performance measures, especially in case of data limitation. However, we could not find consistent results between the ratio analysis model and the ratio-based DEA ones (Panel- and Malmquist Index-DEA) in terms of scores, trends, and determinants.