Bank efficiency in the new European Union member states: Is there convergence?

Emmanuel Mamatzakis, Christos Staikouras and Anastasia Koutsomanoli-Filippaki

International Review of Financial Analysis, 2008, vol. 17, issue 5, 1156-1172

Abstract: We employ the stochastic frontier approach and estimate a common frontier in order to examine cost and profit efficiency in the banking systems of the ten new European Union member states over the period 1998-2003. The results indicate a generally low level of cost and an even lower level of profit efficiency, whilst we do not observe marked differences of inefficiency scores across countries. Foreign banks outperform both state-owned and domestic private-owned banks in terms of profit efficiency, though results are less clear in the case of cost efficiency. In addition, [beta]- and [sigma]-convergence criteria indicate some convergence in cost efficiency across the new member states, yet no convergence appears to have been achieved in terms of profit efficiency.

Keywords: Banking; Cost; efficiency; Profit; efficiency; Convergence; New; EU; member; states (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (67)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:17:y:2008:i:5:p:1156-1172

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