 Financial Performance EvaluationKausik Chaudhuri and Tirthankar Chowdhury Journal of Emerging Market Finance, 2012, vol. 11, issue 1, 1-36 Abstract: We propose a different methodology to assess the financial performance of banks: Multiple Indicator, Multiple Cause (MIMIC) Variable model. We also consider other existing methodologies in the literature for estimation of bank performance. The result shows that the influence of funds in affecting the performance of banks, which have been considered a latent construct here, has been increasing over the years. The latent performance score of the public-sector banks is always higher than the private-sector banks. The same is obtained even if we use the semi-parametric stochastic frontier model: The public-sector (nationalised) banks perform better than the Indian private banks (domestic) in terms of advancing loans only. We justify the use of MIMIC model as an alternative by comparing rank correlation between the MIMIC and semi-parametric stochastic frontier model. Our results demonstrate that financial market development through deregulation creates a competitive and efficient banking sector. JEL Classification : C58, G21, G28 Keywords: MIMIC model; semi-parametric stochastic frontier model; deregulation; India (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:emffin:v:11:y:2012:i:1:p:1-36 DOI: 10.1177/097265271101100101 Access Statistics for this article More articles in Journal of Emerging Market Finance from Institute for Financial Management and Research |
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