Bank cost efficiency as distribution dynamics: controlling for specialization is important

Emili Tortosa-Ausina

Investigaciones Economicas, 2003, vol. 27, issue 1, 71-96

Abstract: This paper analyzes the dynamics of cost efficiency scores in the Spanish banking industry during the 1985—1995 period and the way in which such dynamics are influenced by specialization. Efficiency is estimated by a nonparametric approach, and a model of distribution dynamics has been applied to assess the evolution of efficiency scores over time. Results show that efficiency at the industry level (mean effciency) has increased importantly and that, considering how the entire distribution evolves, there are some important patterns that the mean and the standard deviation fail to uncover, such as multi-modality. In addition, more light is shed on efficiency dynamics when each firm’s output mix is controlled for, as efficiency scores tend to become closer much faster.

Keywords: Banking; distribution dynamics; efficiency; product mix (search for similar items in EconPapers)
JEL-codes: C14 C30 C61 G21 L5 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: -BANK COST EFFICIENCY AS DISTRIBUTION DYNAMICS: CONTROLLING FOR SPECIALIZATION IS IMPORTANT (1999)
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