Efficiency of Thai Commercial Banks: Pre- vs. Post-1997 Financial Crisis
Pornchai Chunhachinda () and
Li Li ()
Additional contact information Pornchai Chunhachinda: Department of Finance, Faculty of Commerce and Accountancy, Thammasat University, Bangkok 10200, Thailand
Li Li: School of Business, University of the Thai Chamber of Commerce, 126/1 Vibhavadee-Rangsit Road, Dindaeng, Bangkok 10400, Thailand
Abstract:
This study measures and compares the profit and cost efficiencies of Thai commercial banks between 1990 and 2008 which has been subdivided into the pre-crisis, the financial crisis, and the post-crisis periods. The efficiency scores are measured using a combination of parametric and non-parametric frontier approach. Both average profit and cost efficiency levels of the post-crisis period are found to be significantly lower than those of the pre-crisis period. The evidence also indicates that the real GDP growth rate and some general and financial characteristics are correlated with the efficiency level of Thai commercial banks.