Mergers and technical efficiency in Spanish savings banks: A stochastic distance function approach

By Rafael A. Cuesta, Luis Orea. 2002

163 citations recorded by the source corpus.

Abstract The aim of this paper is to test the temporal variation of technical efficiency of Spanish savings banks during the period 1985–1998. Furthermore, we test whether merged and non-merged firms have different levels and temporal patterns of technical efficiency. A stochastic output distance function (R.W. Shephard, Theory of Cost and Production Functions, Princeton University Press, Princeton, NJ) is employed to accommodate multiple output technology. The distance function provides the advantage that it does not need information about prices, so it can accommodate the multi-product nature of the financial sector only using the quantities as data (an important point when the assumptions about perfectly competitive markets are unlikely to be met). The temporal variation of efficiency is modeled extending the Battese and Coelli (Journal of Productivity Analysis 3 (1992) 153–169) approach in two ways: relaxing the monotonicity of the temporal variation pattern of the efficiency term, and allowing for different patterns of efficiency change between merged and non-merged firms.

Subfields: Economics and Econometrics, Finance, Management Science and Operations Research

View Paper: https://www.semanticscholar.org/paper/016d8888b298c4eb3ae43e3d7ece912db76e38e8

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Citations in the corpus

Hyperbolic Efficiency and Parametric Distance Functions: With Application to Spanish Savings Banks (2005, background): “Examples of recent studies using partially oriented (i.e., output or input) parametric distance functions are English et al. (1993), Lovell et al. (1994), Coelli and Perelman (1996, 2000) and Cuesta and Orea (2002).”
Efficiency in Islamic and conventional banking: an international comparison (2010, methodology): “A production technology can be represented by the technology set, which is the technically feasible combination of inputs and outputs (Coelli et al. 1998; Cuesta and Orea 2002 ).”
Parametric Decomposition of a Generalized Malmquist Productivity Index (2002, result): “7. The right-hand side of equation (9) is also quite similar to that proposed by Coelli, Rao and Battese (1998) in a translog production function example with constant returns to scale.”
The European Port Industry: An Analysis of its Economic Efficiency (2007, methodology): “The most common method to do so was developed by Battese and Coelli (1988); it applies an additive term as suggested by Cuesta and Orea (2002), to account for the fact that we are estimating an output oriented distance function.”
The Econometric Approach to Efficiency Analysis (2008, background): “The literature on frontier production and cost functions and the calculation of efficiency measures begins with Debreu (1951) and Farrell (1957) [though there are intellectual antecedents, e.g., Hicks’s (1935) suggestion that monopolists would enjoy their position through the attainment of a quiet l”
Interpreting and Testing the Scaling Property in Models where Inefficiency Depends on Firm Characteristics (2006, methodology): “years (1992-1998). These data were previously analyzed by Cuesta and Orea (2002) and Han,”
Reforms and infrastructure efficiency in Spain's container ports (2005, methodology): “We applied the methodology developed by Battese and Coelli (1988) for panel data and apply an additive term as suggested by Cuesta and Orea (2002), to account for the fact that we are estimating an output oriented distance function.”