Banking efficiency in Brazil

Carlos Barros and Peter Wanke

Journal of International Financial Markets, Institutions and Money, 2014, vol. 28, issue C, 54-65

Abstract: This paper analyses efficiency in Brazilian banks from 1998 to 2010 with a Bayesian dynamic frontier model. This model provides a more structural explanation for the variation in bank inefficiency than that has been presented by previous models, and also allows for cost inefficiency effects. On average, the dynamic frontier results, estimated via the Markov Chain Monte-Carlo simulation, indicate that Brazilian banks improved in terms of efficiency over time. Factors found to be important determinants of cost efficiency include public banks and foreign banks that are statistical insignificants, merger and acquisitions, big banks, deregulation and stressed banks that are statistical significant. Big bank and deregulation are the only variables that decrease costs in the Brazil market. Several Policy implications are derived.

Keywords: Brazil; Banking; Efficiency; Bayesian model (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1042443113000802
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:28:y:2014:i:c:p:54-65

DOI: 10.1016/j.intfin.2013.10.004

Access Statistics for this article

Journal of International Financial Markets, Institutions and Money is currently edited by I. Mathur and C. J. Neely

More articles in Journal of International Financial Markets, Institutions and Money from Elsevier
Bibliographic data for series maintained by Catherine Liu ().