A Non-parametric Analysis of the Italian Banking System's Efficiency

Sergio Destefanis

MPRA Paper from University Library of Munich, Germany

Abstract: This paper analyses through non-parametric methods the technical efficiency of a cross-section of 728 Italian banks belonging to different institutional categories (limited companies, credit societies, rural banks and credit cooperatives). It applies an extension of the Free Disposal Approach, which takes into account the existence of input and output slacks when computing technical efficiency. The main results point to a slack structure heavily weighted toward capital inputs, showing that the proliferation of branches after 1990 has engendered significant over-branching in the Italian banking sector. The evidence is also compatible with a direct relationship between the economic environment in southern Italy and the lower technical efficiency of southern Italian credit cooperatives.

Keywords: Technical efficiency; Free Disposal Hull; credit cooperatives (search for similar items in EconPapers)
JEL-codes: D24 G21 L89 (search for similar items in EconPapers)
Date: 2001-02-19
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Published in M. Baldassarri, M. Bagella, L. Paganetto (Eds.), Financial markets: Imperfect Information and Risk Management (reprinted from Rivista di Politica Economica, 1996, Vol. 86, Selected Papers) (2001): pp. 339-366

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