Technical Efficiency and the Probability of Bank Failure among Agricultural and Non-Agricultural Banks

Xiaofei Li, Cesar Escalante (), James Epperson and Lewell F. Gunter

No 124591, 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington from Agricultural and Applied Economics Association

Abstract: This study is designed to analyze bank failures from the technical efficiency standpoint under a stochastic cost frontier framework and evaluate the reliability of the technical efficiency measure as a determinant of the financial health of banks and probability to succeed or fail at the height of the current recessionary period. Results of this analysis confirm that successful agricultural banks have been operating more efficiently than surviving nonagricultural banks. This result helps to refute the contention that farm loans are at a relatively higher level of riskiness.

Keywords: Agricultural; Finance (search for similar items in EconPapers)
Pages: 29
Date: 2012
New Economics Papers: this item is included in nep-ban and nep-eff
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea12:124591

DOI: 10.22004/ag.econ.124591

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