Modelling technical efficiency of firms under one-step and two-step approaches (the case of commercial banks)
Andrei Vernikov () and
Mikhail Mamonov ()
Additional contact information
Mikhail Mamonov: Institute of Economic Forecasting RAS, Moscow
Applied Econometrics, 2018, vol. 49, 67-90
Over the past two decades, empirical research on firm cost efficiency employed two alternative approaches within stochastic frontier analysis (SFA), namely one-step and two-step algorithms. How do their results relate to each other on the same sample of firms? To answer this question, we compare cost efficiency estimations obtained via the two alternative methods applied to Russian bank quarterly data for 2005–2015. Banks were grouped ownership-wise into core public banks, other public banks, domestic private banks, and foreign subsidiary banks. Our results suggest that the average score of each group cost efficiency depends materially on the choice of the algorithm. While the two-step approach failed to reveal statistically significant differences across the four bank groups, the one-step alternative did reveal them. Core public banks lead the cost efficiency ranking, followed by other public banks and domestic private banks, while foreign subsidiary banks lag behind.
Keywords: SFA; stochastic frontier analysis; banks; cost efficiency; lending; public banks (search for similar items in EconPapers)
JEL-codes: G21 G28 P52 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://pe.cemi.rssi.ru/pe_2018_49_067-090.pdf Full text (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ris:apltrx:0338
Access Statistics for this article
Applied Econometrics is currently edited by Sergei Aivazian
More articles in Applied Econometrics from Publishing House "SINERGIA PRESS"
Bibliographic data for series maintained by Anatoly Peresetsky ().