Determinants of bank efficiency: The case of Brazil

Patricia Langsch Tecles and Benjamin Tabak

European Journal of Operational Research, 2010, vol. 207, issue 3, 1587-1598

Abstract: This paper analyzes the efficiency of the Brazilian banking sector over the post-privatization period of 2000-2007. We employ a Bayesian stochastic frontier approach, which provides exact efficiency estimates and confidence intervals and thus, allows an accurate comparison across institutions and bank groups. The results suggest that large banks are the most cost and profit efficient, supporting the concentration process observed in recent years. Foreign banks have achieved a good performance through either the establishment of new affiliates and the acquisition of local banks. The remaining public banks have had improvements in cost efficiency, but are relatively profit inefficient. Finally, we observe a positive impact of capitalization on efficiency.

Keywords: Stochastic; frontier; Bayesian; methods; Banking; system; Emerging; markets (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (59)

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Working Paper: Determinants of Bank Efficiency: the Case of Brazil (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:207:y:2010:i:3:p:1587-1598

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