Determinants of bank efficiency: Evidence from a semi-parametric methodology

Manthos Delis () and Nikolaos Papanikolaou ()

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we use a semi-parametric two-stage model to examine the effect of bank-specific, industry-specific and macroeconomic determinants of bank efficiency. This method, proposed by Simar and Wilson (2007), relaxes several deficiencies of previous two-stage analyses, which regress non-parametric estimates of bank efficiency on exogenous determinants. In particular, we propose a bootstrap procedure to be used in the second stage and we compare the results obtained to the equivalents of a Tobit model. We suggest that the Tobit regressions inaccurately provide insignificant estimates for the effect of bank size, industry concentration and economic investment on bank efficiency, a fact that illustrates the power of the new method. Since the effect of these determinants has been ambiguous in previous literature, this may be a desideratum for future research.

Keywords: Bank efficiency; semi-parametric models (search for similar items in EconPapers)
JEL-codes: C14 G21 (search for similar items in EconPapers)
Date: 2009-01
New Economics Papers: this item is included in nep-eff
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Citations: View citations in EconPapers (59)

Published in Managerial Finance 3.35(2009): pp. 260-275

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:13893

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