Efficiency and Scale Economies in Transition Economies: Evidence from Poland and the Czech Republic

Adnan Kasman

Emerging Markets Finance and Trade, 2005, vol. 41, issue 2, 60-81

Abstract: This paper examines the cost efficiency and scale economies of banks operating in Poland and the Czech Republic during the period from 1995 to 2000. A common cost frontier with country-specific environmental variables is estimated for a panel of fifty-four banks. A stochastic frontier model is used to estimate the cost efficiency and economies of scale. The results show the importance of environmental variables in the definition and specification of the common frontier. It is found that Polish banks are, on average, more efficient than Czech banks. The results further suggest that foreign banks operating in the Czech banking sector have significantly higher efficiency levels than those of domestic banks. Finally, there is evidence of significant economies of scale for small and medium-sized banks, but diseconomies of scale for large-sized banks.

Keywords: cost inefficiency; economies of scale; transition economies (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://mesharpe.metapress.com/link.asp?target=contribution&id=WXC7FLJYRUD873EP (text/html)
Access to full text is restricted to subscribers.

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:mes:emfitr:v:41:y:2005:i:2:p:60-81

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().