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Technology gaps in European banking: Put the blame on inputs or outputs?

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  • Kontolaimou, Alexandra
  • Kounetas, Konstantinos
  • Mourtos, Ioannis
  • Tsekouras, Kostas

Abstract

This paper investigates the production efficiency of 12 European banking systems over the period 1997–2004, taking into account possible technology heterogeneity. Using a non-parametric metafrontier framework, efficiency and metatechnology ratio measures are computed and decomposed into input- and output-invariant components. Empirical findings indicate the existence of significant and rather increasing technology heterogeneity within European banking. A typology of the national banking systems is also developed, based on the overall productive performance with respect to the European technological edge, the absorptive capacity and the role of knowledge spillover effects. Decomposition results draw attention to catching up policies focusing on input and/or output scale adjustments.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 29 (2012)
Issue (Month): 5 ()
Pages: 1798-1808

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Handle: RePEc:eee:ecmode:v:29:y:2012:i:5:p:1798-1808

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Web page: http://www.elsevier.com/locate/inca/30411

Related research

Keywords: Production efficiency; Metafrontier; Technology gaps; Banking firms; Data envelopment analysis;

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