EconPapers    
Economics at your fingertips  
 

Competition and Efficiency in EU Banking

Emmanuel Tsiritakis ()
Additional contact information
Emmanuel Tsiritakis: Department of Banking and Financial Management, University of Piraeus, Greece

SPOUDAI Journal of Economics and Business, 2017, vol. 67, issue 2, 3-25

Abstract: On the road to the new landscape in EU banking brought on by the financial crisis we assess the relationship between the level of competitiveness and efficiency. We estimate X-inefficiency for a sample of banks operating in the European Union using the stochastic frontier approach. We relate efficiency levels to market competitiveness employing Panzar & Rosse’s H statistic for three clusters of banks constructed according to their efficiency scores. In addition, we examine the impact of efficiency, as well as concentration, on banking competition measured by the Net Interest Margin (NIM), controlling for bank specific factors. Overall we find that larger banks tend to be more efficient. In contrast, it seems that there exists a group of smaller banks in our sample that are ‘relationship’, ‘niche’ or ‘regionally’ protected from the hazards of competition and are X-inefficient. Moreover, the efficient group of banks entertains increases in NIM as they get more efficient, indicating that efficiency gains are not passed on to customers.

Keywords: Banking; Competition; Efficiency; Concentration (search for similar items in EconPapers)
JEL-codes: G20 G21 L10 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://spoudai.unipi.gr/index.php/spoudai/article/ ... /2633/2584-3117-1-SM (application/pdf)

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:spd:journl:v:67:y:2017:i:2:p:3-25

Access Statistics for this article

More articles in SPOUDAI Journal of Economics and Business from SPOUDAI Journal of Economics and Business, University of Piraeus Contact information at EDIRC.
Bibliographic data for series maintained by SPOUDAI Journal of Economics and Business ().

 
Page updated 2019-07-24
Handle: RePEc:spd:journl:v:67:y:2017:i:2:p:3-25