Testing for convergence in bank efficiency: a cross-country analysis

Kösedağ, Arman; Denizel, Meltem; Özdemir, Öznur

doi:10.1080/02642060903580565

Cited by 6 publications

(6 citation statements)

References 21 publications

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“…public or private ownership of capital, the origin (domestic or foreign) of investors, or the nature of the regulations that govern banking activity (Chortareas, Girardone, & Ventouri, 2012Servin, Lensink, & van den Berg, 2012). Lastly, there has been analyses at a global scale (Barth, Lin, Mac, Seade, & Song, 2013;Kösedağ, Denizel, & Özdemir, 2011), as well as in terms of developed countries (Brissimis, Delis, & Tsionas, 2010;Feng & Serletis, 2010;Tabak, Boueri, & Fazio, 2013), and emerging countries or regions (Ariss, 2010;Assaf, Matousek, & Tsionas, 2013;Ray & Das, 2010), and economies in transition (Bonin, Hasan, & Wachtel, 2005;Koutsomanoli-Filippaki, Margaritis, & Staikouras, 2009). …”

Section: Efficiency In the Lac Banking Industry: A Brief Review Of LImentioning

confidence: 96%

Assessing the performance of the Latin American and Caribbean banking industry: Are domestic and foreign banks so different?

Sáez-Fernández

Picazo‐Tadeo

Beltrán-Esteve

2015

Cogent Economics & Finance

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This paper studies the relative performance of domestic and foreign banks in the Latin American and Caribbean banking industry. Data Envelopment Analysis is used to compute technical efficiency scores for the years 2001 and 2013. Our main contribution is twofold. On the one hand, we assess performance at the level of the management of specific production factors. On the other hand, we distinguish program efficiency from managerial efficiency, which allows us to evaluate whether the differences in technical efficiency between national and foreign banks are due to the use of different technologies (program efficiency) or, conversely, differences in the managerial capacities of managers in both categories of banks (managerial efficiency). The results show that foreign banks are more efficient than domestic ones, and provide evidence that the greater efficiency of foreign banks is mostly due to the superior technology they use.The financial crises experienced by the Latin American and Caribbean region in the 1980s and the first half of the 1990s boosted reforms in the banking system aimed at adapting banks to international solvency standards, liberalizing their operational capacity, opening to international competition, and increasing their efficiency and productivity. Foreign banks were encouraged to enter these countries and were also meant to play a leadership role in the process of modernization; however, the role they actually played still remains a cause for debate. This paper contributes to this ongoing debate by analyzing performance in the regional banking industry. Our results show that foreign banks are managed more efficiently than their domestic counterparts; furthermore, this superiority is determined to a great extent by the use of more efficient technologies. Accordingly, our results appear to support the opening up of the Latin American industry, and the positive role of foreign banks in its modernization.

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Section: Efficiency In the Lac Banking Industry: A Brief Review Of LImentioning

confidence: 96%

Assessing the performance of the Latin American and Caribbean banking industry: Are domestic and foreign banks so different?

Sáez-Fernández

Picazo‐Tadeo

Beltrán-Esteve

2015

Cogent Economics & Finance

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“…Some studies that have used Tobit model to regress DEA efficiency scores against environmental variables include Batir, Volkman, & Gungor (2017), Chan, Zaini, & Karim (2016), Saha, Ahmad, & Dash (2015), Rosman, Wahab, & Zainol (2014), and Ab-Rahim, Md-Nor, Ramlee, & Ubaidillah (2012). Approaches on which studies base input and output selections are production, intermediation, value added, asset, and operating (Sharma, Sharma, & Barua, 2013), however, the production and intermediation approaches are widely used (Banya & Biekpe, 2018;Sharma, Sharma, & Barua, 2013;Kosedag, Denizel, & Ozdemir, 2011). The production approach views banks as using labour and capital in the process of providing services to customers, thus, it considers deposits and the number of accounts or loan transactions as outputs (Tripe, 2003;Berger & Humphrey, 1997).…”

Section: Methodology and Datamentioning

confidence: 99%

Cost Efficiency Determinants: Evidence from the Canadian Banking Industry

Oredegbe¹

2019

IJBM

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This study examines the cost efficiency of the banking industry in Canada. Utilizing 12 years of data (i.e., 2006 to 2017), and a two-stage data envelopment analysis (DEA), it provides insight on the determinants of the industry’s cost efficiency. It finds that the industry is cost inefficient, and that it could reduce costs by 11.52 percent. The cost inefficiency is due to technical and allocative inefficiencies, with technical inefficiency playing a dominant role. The technical efficiency decomposition shows that pure technical efficiency improved, but the scale efficiency deteriorated. The analysis of the determinants of cost efficiency reveals that deposit conversion into loans, high capitalization, and managerial tolerance for increase in administrative expense drive cost efficiency. On the other hand, market power and diversification diminish cost efficiency. In addition, the impact of profitability and credit risk are inconsequential to cost efficiency. This study contributes to literature by providing insights unique to Canada. Managers in the industry, policy makers, and regulators can point to these findings as empirical evidence supporting measures aimed at increasing the industry’s competitiveness and resilience.

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“…As far as geography is concerned, some papers have studied banking performance on a global scale (Kösedağ et al. ), while others have specifically focused on developed economies (Chortareas et al. 2012; Tabak et al.…”

Section: Performance In Banking: a Brief Literature Reviewmentioning

confidence: 99%

Are Lac Cooperative and Commercial Banks So Different in Their Management of Non‐performing Loans?

Jiménez-Hernández

Picazo‐Tadeo

Sáez-Fernández

2018

Ann Public Coop Econ

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This paper assesses technical efficiency in the management of nonperforming loans (NPLs) in the Latin American and Caribbean (LAC) banking industry. To that end, Data Envelopment Analysis techniques are employed with data from the years 2013 to 2016 on a sample of 307 LAC cooperative and commercial banks.Our main contribution to existing literature is that differences of efficiency between cooperative banks and commercial banks are assessed as the result of the different capacities of their managers -managerial efficiency -and the so-called programme efficiency, which represents differences in the technology used by these two categories of entities. Our principal result suggests that the technology used by cooperative banks in the management of NPLs is more efficient than the technology of commercial banks. Andrés J Picazo-Tadeo and Francisco J Sáez-Fernández acknowledge the financial support of the Spanish Ministry of Economy and Competitiveness and the European Regional Development Fund (project ECO2016-75237-R). Andrés J Picazo-Tadeo also thanks the Valencian Regional Government for its support (project PROMETEOII/2014/053). Moreover, we are thankful for useful comments and suggestions received from the referees.

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Testing for convergence in bank efficiency: a cross-country analysis

Cited by 6 publications

References 21 publications

Assessing the performance of the Latin American and Caribbean banking industry: Are domestic and foreign banks so different?

Assessing the performance of the Latin American and Caribbean banking industry: Are domestic and foreign banks so different?

Cost Efficiency Determinants: Evidence from the Canadian Banking Industry

Are Lac Cooperative and Commercial Banks So Different in Their Management of Non‐performing Loans?

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