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Measuring Bank Efficiency: A Meta-Regression Analysis

Zuzana Irsova () and Tomas Havranek ()

Prague Economic Papers, 2010, vol. 2010, issue 4, 307-328

Abstract: This article presents a meta-regression analysis of 32 studies on frontier efficiency measurement in banking, focusing on the sensitivity of the reported estimates to the methodological design. Our findings suggest that study design is crucial for the resulting scores. The differences between the scores estimated using parametric and non-parametric approaches arise when the Fourierflexible functional form is used since this functional form yields lower scores. Generally, the higher the number of observations, the higher is the average estimated efficiency. The removal of scale effects using equity capital increases the profit efficiency but it is insignificant for other scores. The efficiency analysis should distinguish the commercial banking from other bank types because the former tends to deliver lower efficiency scores.

Keywords: banking; meta-analysis; frontier models; efficiency analysis (search for similar items in EconPapers)
JEL-codes: C13 G21 L25 (search for similar items in EconPapers)
Date: 2010
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DOI: 10.18267/j.pep.379

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