Factors Affecting Cost Efficiency of Commercial Banks in Kyrgyzstan

Dastan Aseinov
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Dastan Aseinov: Kyrgyz - Turkish Manas University

Journal of Finance Letters (Maliye ve Finans Yazıları), 2019, vol. 34, issue 112, 31-56

Abstract: Efficiency of commercial banks is among important challenges not only for their shareholders and managers, but also for regulation and supervision authorities. The aim of this study is to examine factors affecting the banking cost efficiency for Kyrgyz banks. We estimate stochastic cost frontier model proposed by Battese and Coelli (1995) using unbalanced panel data set captured 23 Kyrgyz commercial banks for period of 2000-2013. Obtained results suggest that capitalization, foreign ownership, credit risk, liquidity risk and currency risk have most influence on banking cost efficiency. Cost efficiency scores can be used as an indicator for monitoring of risk-taking behavior of commercial banks by regulatory and supervisory authorities.

Keywords: banking; stochastic frontier analysis; transition economies; cost efficiency (search for similar items in EconPapers)
JEL-codes: C30 D24 G21 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:acc:malfin:v:34:y:2019:i:112:p:31-56

DOI: 10.33203/mfy.479424

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