Bank efficiency in the new European Union member states: Is there convergence? ☆

By Emmanuel C. Mamatzakis, Christos Staikouras, A. Koutsomanoli-Filippaki. 2008

148 citations recorded by the source corpus.

We employ the stochastic frontier approach and estimate a common frontier in order to examine cost and profit efficiency in the banking systems of the ten new European Union member states over the period 1998-2003. The results indicate a generally low level of cost and an even lower level of profit efficiency, whilst we do not observe marked differences of inefficiency scores across countries. Foreign banks outperform both state-owned and domestic private-owned banks in terms of profit efficiency, though results are less clear in the case of cost efficiency. In addition, [beta]- and [sigma]-convergence criteria indicate some convergence in cost efficiency across the new member states, yet no convergence appears to have been achieved in terms of profit efficiency.

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

View Paper: https://www.semanticscholar.org/paper/e0c92df94e872596a6535e4780065a2cb43ddfd7

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Citations in the corpus

Cost and profit efficiency of conventional and Islamic banks in GCC countries (2010, background): “In line with the recent developments in the literature (Fries and Taci 2005; Perera et al. 2007; Mamatzakis et al. 2008 ) and in order to capture heterogeneity across countries, the cost function in this study is extended to accommodate country-specific variables and thus appears as follows:”
Evolution of bank efficiency in Brazil: A DEA approach (2010, background): “Mamatzakis et al. (2008) find lower levels of inefficiency for foreign banks among the ten new European Union member states.”