Banking Efficiency in Chile: a Profit Frontier Approach

José Luis Carreño G., Gino Loyola and Yolanda Portilla ()

Journal Economía Chilena (The Chilean Economy), 2010, vol. 13, issue 3, 33-65

Abstract: This paper characterizes the evolution of the efficiency X in the Chilean banking industry over 1987 to 2007, based on a profit frontier approach. Our results suggest that over this period the Chilean banking sector has attained just a 15% over its maximum profits. This inefficiency basically arises from a technical source rather than an assignative one, and mainly affects domestic and small banks. Nevertheless, the level of efficiency X of the industry as a whole has dramatically improved since the late 1990’s, which is consistent with important economic, technological and regulatory transformations.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:chb:bcchec:v:13:y:2010:i:3:p:33-65

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