Determinants of bank efficiency: evidence from a semi-parametric mathodology

Delis, Manthos D and Papanikolaou, Nikolaos I (2009) Determinants of bank efficiency: evidence from a semi-parametric mathodology. Managerial Finance, 35 (3). pp. 260-275. ISSN 0307-4358

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Purpose 13 This paper aims to analyze bank efficiency into a number of bank-specific, industryspecific and macroeconomic determinants.

Design/methodology/approach 13 The authors follow a semi-parametric two-stage methodology, where productive efficiency is derived via a non-parametric technique in the first stage and then the scores obtained are linked to a series of determinants of bank efficiency, using a double bootstrapping procedure.

Findings 13 Overall, it is found that the banking sectors of almost all the sample countries show a gradual improvement in their efficiency levels. The model used shows that a number of determinants like bank size, industry concentration and the investment environment have a positive impact on bank efficiency, which is not the case when standard Tobit models are employed.

Research limitations/implications 13 The findings have important implications for the relevance
of well-known hypotheses that refer to the performance of the banking sectors, like the structure conduct-performance and the efficient structure hypotheses. These implications are not necessarily verified when past conventional econometric methodologies are used.

Practical implications 13 The paper offers new insights to policy makers, bank managers and
practitioners on the relevance of a number of driving factors of bank efficiency that might help them to improve the performance of the banking system and enhance the quality of services provided.

Originality/value 13 This is the first paper in the bank efficiency literature that employs a semiparametric two-stage model, which relaxes several deficiencies of previous two-stage empirical approaches thus, offering a solution to the many problematic features of standard censored regressions

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Business and Management
Subjects: H Social Sciences > HG Finance
H Social Sciences > HG Finance > HG1501 Banking
Related URLs:
Depositing User: Nikolaos Papanikolaou
Date Deposited: 11 Feb 2014 11:39
Last Modified: 08 Mar 2017 04:48

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