A Principal Component Analysis Approach to Measure Contributions of Shinkin Banks to Regional Economies in Northeast Area of Japan

As one kind of regional finance institutions (RFIs), shinkin banks have closer relations with development of regional economies than city banks. This paper aims to apply principal components analysis to evaluate the performance of shinkin banks' contribution to regional economies in northeast area of Japan. Different from the existing studies, this paper is the first attempt to use principal components analysis to analysis of shinkin banks. Meanwhile, we limit our analysis to 27 shinkin banks in the northeast area of Japan and put our emphasis on extracting an effective indicator to measure the contributions of the shinkin banks to regional economies and clarify the issues for the shinkin banks to improve or strengthen their regional contribution