Level and Determinants of Foreign Bank Efficiency in a Pacific Island Country

Parmendra Sharma (), Neelesh Gounder and Dong Xiang ()
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Parmendra Sharma: Department of Accounting Finance and Economics, Griffith Asia Institute, Griffith University, Queensland, Australia
Dong Xiang: International Institute for Financial Studies, Jiangxi University of Finance and Economics, P. R. China

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2015, vol. 18, issue 01, 1-26

Abstract: This study fills a huge gap in literature by providing some evidence on the level and determinants of bank efficiency in a Pacific island context. DEA results show that overall efficiency levels may be lower than in Australia, the home country of major banks. Dynamic GMM and panel data results show that personnel expenses and bank credit matter for efficiency, but not other bank-specific and macroeconomic factors. These insights substantially improve policy-making capacities for Fiji and other Pacific economies, including Papua New Guinea, Samoa, Tonga, Solomon Islands and Vanuatu where banking and regulatory systems and structures are highly comparable.

Keywords: Bank efficiency; DEA; dynamic GMM; Pacific Island countries; Fiji; C67; G21 (search for similar items in EconPapers)
JEL-codes: G1 G2 G3 (search for similar items in EconPapers)
Date: 2015
References: View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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DOI: 10.1142/S0219091515500058

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