Evaluating cost and profit efficiency: a comparison of parametric and nonparametric methodologies

Manthos Delis (), Anastasia Koutsomanoli-Filippaki, Christos Staikouras and Katerina Gerogiannaki

MPRA Paper from University Library of Munich, Germany

Abstract: The objective of this article is 2-fold. First, it provides an empirical assessment of the cost and profit stochastic frontiers based on a panel dataset of Greek commercial banks over the period 1993 to 2005. Second, on the basis of the same sample, it also compares the most widely used parametric and nonparametric techniques to cost efficiency measurement, namely, the Stochastic Frontier Approach and Data EnvelopmentAnalysis. The results suggest greater similarities between the predictions of cost and profit efficiency methods than between parametric and nonparametric techniques. Such evidence is new in the literature and calls for a more technically level playing field for estimating bank efficiency.

Keywords: Bank cost and profit efficiency; Parametric and non-parametric methods (search for similar items in EconPapers)
JEL-codes: C14 G21 L25 (search for similar items in EconPapers)
Date: 2008-01-08
New Economics Papers: this item is included in nep-ban and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:14039

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