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
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.