Banking sectors in transition economies have experienced major transformations throughout the 1990s. While some countries have been successful in eliminating underlying distortions and restructuring their financial sectors, in some cases financial sectors remain underdeveloped and the rates of financial intermediation continue to be low. We estimate indicators of commercial bank efficiency by applying a non-parametric estimation technique, data envelopment analysis (DEA), to bank-level data from a wide range of transition countries. In addition to stressing the importance of some bank-specific variables, the censored Tobit analysis suggests that: (1) foreign ownership with controlling power and enterprise restructuring enhance commercial bank efficiency; (2) the effects of prudential tightening on the efficiency of banks vary across different prudential norms; and (3) consolidation is likely to improve efficiency of banking operations. Overall, the results confirm the usefulness of DEA for transition-related applications and shed some light on the question of the optimal architecture of a banking system. Comparative Economic Studies (2006) 48, 497–522. doi:10.1057/palgrave.ces.8100129

Banking sectors in transition economies have variables. In addition to stressing the importance of some experienced major transformations throughout the bank-specific variables, the censored Tobit analysis 1990s. While some countries have been successful in suggests that: eliminating underlying distortions and restructuring their * Foreign ownership with controlling power and financial sectors, in some cases financial sectors remain enterprise restructuring enhance commercial bank underdeveloped and the rates of financial intermediation efficiency. continue to be quite low. * The effects of prudential tightening on the efficiency Grigorian and Manole estimate indicators of of banks vary across different prudential norms. commercial bank efficiency by applying a version of Data * Consolidation is likely to improve efficiency of Envelopment Analysis (DEA) to bank-level data from a banking operations. wide range of transition countries. They further extend Overall, the results confirm the usefulness of DEA for the analysis by explaining the differences in efficiency transition-related applications and may shed light on the between financial institutions and countries by a variety optimal architecture of a banking system. of macroeconomic, prudential, and institutional This paper-a product of the Private and Financial Sector Development Unit, Europe and Central Asia Region-is part of a larger effort in the region to disseminate the results of research on transition issues. Copies of the paper are available free from the World Bank,

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: Many firms cite financial constraints as some of the most important impediments to their investment and growth. Using a unique data set from the Czech Republic this paper investigates the importance of financing constraints in the context of exporters. It finds that exporters are less financially constrained than non-exporters. However, after carefully correcting for possible endogeneity and selection issues, the evidence points to less constrained firms self-selecting into exporting rather than exporting alleviating firms' financial constraints. The analysis suggests that easing firms' credit constraints may play an important role in facilitating exporting and that welldeveloped financial markets that would decrease firms' cost of external finance may be needed in order to benefit from selling in foreign markets. Terms of use: Documents in EconStor may

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: This study uses a new, innovative measure of trade protection and finds that less trade protection is associated with higher income per capita, using data from 131 developed and developing countries. Terms of use: Documents in EconStor may

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Abstract. Bahrains financial sector development strategy succeeded in building a leading regional banking center, which has become one of the main engines of growth and sources of employment. Based on banklevel productivity estimates obtained using non-parametric estimation, the paper concludes that Bahrain continues to occupy a front-runner position among sample GCC countries. Results also reveal that: (i) banks in Bahrain still lag behind their Singaporean counterparts (included in the study as a benchmark), and (ii) there is strong competition from other countries in the region. The results appear to be robust with respect to changes in the sample size and model specifications.

Banking sectors in transition economies have variables. In addition to stressing the importance of some experienced major transformations throughout the bank-specific variables, the censored Tobit analysis 1990s. While some countries have been successful in suggests that: eliminating underlying distortions and restructuring their * Foreign ownership with controlling power and financial sectors, in some cases financial sectors remain enterprise restructuring enhance commercial bank underdeveloped and the rates of financial intermediation efficiency. continue to be quite low. * The effects of prudential tightening on the efficiency Grigorian and Manole estimate indicators of of banks vary across different prudential norms. commercial bank efficiency by applying a version of Data * Consolidation is likely to improve efficiency of Envelopment Analysis (DEA) to bank-level data from a banking operations. wide range of transition countries. They further extend Overall, the results confirm the usefulness of DEA for the analysis by explaining the differences in efficiency transition-related applications and may shed light on the between financial institutions and countries by a variety optimal architecture of a banking system. of macroeconomic, prudential, and institutional This paper-a product of the Private and Financial Sector Development Unit, Europe and Central Asia Region-is part of a larger effort in the region to disseminate the results of research on transition issues. Copies of the paper are available free from the World Bank,