“Bank Business Model Migrations in Europe: Determinants and Effects” -Corporate Governance special issue of the British Journal of Management – BJM
The paper “Bank Business Model Migrations in Europe: Determinants and Effects” has been published in the Corporate Governance special issue of the British Journal of Management – BJM. The paper is part of the Bank Business Models (BBM) analysis, which was first introduced by Ayadi et al (2010).
The paper has been co-authored by Prof. Rym Ayadi, Banking Stakeholders Group of the European Banking Authority, President of the Euro-Mediterranean Economists Association – EMEA, and Honorary Professor at the Business School (former CASS), Prof. Barbara Casu, Director of the Centre for Banking Research of the Business School (formerly Cass), Prof. Paola Bongini, Professor of Banking and Finance, University of Milano-Bicocca, and Doriana Cucinelli Assistant Professor in Financial Intermediaries at University of Milano-Bicocca.
In response to post‐crisis regulatory reforms, the European banking sector has undergone significant changes that have led banks to reconsider their strategies, structures and operations. Based on a sample of over 3,000 banks from 32 European countries during the period 2010–2017, we identify banks’ business models based on cluster analysis and track their evolution. We then apply a logistic regression and find that banks with higher risk and lower profitability are more likely to change their business model. Employing a propensity score matching approach, we investigate the effect of migration on bank performance and find that changing the business model affects banks positively (i.e. migrating banks increase their profitability, stability and cost efficiency). The effect of migration differs depending on the target business model. When switches are a consequence of being acquired or motivated by regulatory compliance, the positive impact remains.
The BBM research platform was conceived by Prof. Rym Ayadi, and it was launched by EMEA in December 2019 to allow researchers working on this area to have open access to the BBM data and research. More research will target the Mediterranean and Africa.
The British Journal of Managementis a quarterly peer-reviewed academic journal. It publishes articles which are of a multi-disciplinary, interdisciplinary, and internationally significant nature, and which are committed to making a positive social impact through thoughtful scholarship. With contributions from around the globe, the journal includes empirical and methodological articles across the full range of business and management disciplines.
The paper is available at https://onlinelibrary.wiley.com/doi/10.1111/1467-8551.12437