Determinants of Commercial Bank Performance in Transition: An Application of Data Envelopment Analysis

David Grigorian and Vlad Manole

Comparative Economic Studies, 2006, vol. 48, issue 3, 497-522

Abstract: Banking sectors in transition economies have experienced major transformations throughout the 1990s. While some countries have been successful in eliminating underlying distortions and restructuring their financial sectors, in some cases financial sectors remain underdeveloped and the rates of financial intermediation continue to be low. We estimate indicators of commercial bank efficiency by applying a non-parametric estimation technique, data envelopment analysis (DEA), to bank-level data from a wide range of transition countries. In addition to stressing the importance of some bank-specific variables, the censored Tobit analysis suggests that: (1) foreign ownership with controlling power and enterprise restructuring enhance commercial bank efficiency; (2) the effects of prudential tightening on the efficiency of banks vary across different prudential norms; and (3) consolidation is likely to improve efficiency of banking operations. Overall, the results confirm the usefulness of DEA for transition-related applications and shed some light on the question of the optimal architecture of a banking system. Comparative Economic Studies (2006) 48, 497–522. doi:10.1057/palgrave.ces.8100129

Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (103)

Downloads: (external link)
http://www.palgrave-journals.com/ces/journal/v48/n3/pdf/8100129a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/ces/journal/v48/n3/full/8100129a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Determinants of Commercial Bank Performance in Transition: An Application of Data Envelopment Analysis (2002)
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:pal:compes:v:48:y:2006:i:3:p:497-522

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41294/PS2

Access Statistics for this article

Comparative Economic Studies is currently edited by Nauro Campos

More articles in Comparative Economic Studies from Palgrave Macmillan, Association for Comparative Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().