Modelling sustainability efficiency in banking

Tan, Yong and Tsionas, Mike G. (2022) Modelling sustainability efficiency in banking. International Journal of Finance and Economics, 27 (3). pp. 3754-3772. ISSN 1076-9307

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We significantly contribute to the empirical literature by investigating sustainability efficiency in the banking industry and decompose it into internal sustainability and external sustainability in an explicit manner. We fill in the gap of the literature by considering internal sustainability from two perspectives which are banking stability and economic performance. We also extend the current studies by including both banks' social contributions (contributions to the society and the company development) and environmental responsibility to the estimation of external sustainability. Finally, we fill in the gap of the literature by estimating the determinants of bank sustainability efficiency. The findings from the output distance function and the panel vector autoregressive model show that the sustainability efficiency level in the Chinese banking industry (2007–2017) ranges from 0.45 to 0.75 (maximum sustainability efficiency score is 1 and minimum sustainability efficiency score is 0). There is a larger difference in terms of external sustainability efficiency in the sample, while stability is still one of the most serious issues, as reflected by the low stability efficiency score compared to other efficiency concepts. The results also show that internal sustainability efficiency is significantly affected by the firm specific determinants, business environment determinants and economic environment determinants.

Item Type:
Journal Article
Journal or Publication Title:
International Journal of Finance and Economics
Additional Information:
This is the peer reviewed version of the following article:Tan, Y, Tsionas, MG. Modelling sustainability efficiency in banking. Int J Fin Econ. 2022; 27: 3754– 3772. doi: 10.1002/ijfe.2349 which has been published in final form at This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
Uncontrolled Keywords:
?? or in bankingparticle-filteringsequential monte carlosustainabilityfinanceeconomics and econometricsaccounting ??
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Deposited On:
14 Apr 2022 14:10
Last Modified:
02 Feb 2024 00:40