Explaining Efficiency Differences Among Large German and Austrian Banks

David Hauner

No 2004/140, IMF Working Papers from International Monetary Fund

Abstract: Cost-efficiency, scale efficiency, and productivity change are estimated by data envelopment analysis; and cost-efficiency is regressed on explanatory variables. No evidence is found for average productivity responding to deregulation over the period studied. State-owned banks are found to be more cost-efficient (likely owing to cheaper funds) and cooperative banks to be about as cost-efficient as private banks. Increasing economies of scale but decreasing economies of scope provide rationale for M&As among banks with similar product portfolios. Interbank and capital market funding is found to be more cost-efficient than deposits when the cost of retail networks is controlled for.

Keywords: WP; technical efficiency; average cost (search for similar items in EconPapers)
Pages: 23
Date: 2004-08-01
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Citations: View citations in EconPapers (12)

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