Technology gaps in European banking: Put the blame on inputs or outputs?

Alexandra Kontolaimou, Kostantinos Kounetas (), Ioannis Mourtos and Kostas Tsekouras

Economic Modelling, 2012, vol. 29, issue 5, 1798-1808

Abstract: This paper investigates the production efficiency of 12 European banking systems over the period 1997–2004, taking into account possible technology heterogeneity. Using a non-parametric metafrontier framework, efficiency and metatechnology ratio measures are computed and decomposed into input- and output-invariant components. Empirical findings indicate the existence of significant and rather increasing technology heterogeneity within European banking. A typology of the national banking systems is also developed, based on the overall productive performance with respect to the European technological edge, the absorptive capacity and the role of knowledge spillover effects. Decomposition results draw attention to catching up policies focusing on input and/or output scale adjustments.

Keywords: Production efficiency; Metafrontier; Technology gaps; Banking firms; Data envelopment analysis (search for similar items in EconPapers)
JEL-codes: C67 D24 G21 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:29:y:2012:i:5:p:1798-1808

DOI: 10.1016/j.econmod.2012.05.028

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