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Financial reporting standards' change and the efficiency measures of EU banks

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  • Dimitras, Augustinos I.
  • Gaganis, Chrysovalantis
  • Pasiouras, Fotios

Abstract

This study aims to examine whether and how bank efficiency estimates are influenced by the shift from local GAAP to IFRS in EU. We use financial statements prepared during the transition period, and stochastic frontier analysis to obtain cost and profit efficiency estimates for a sample of 141 banks from 15 countries. Our main finding is that the bank efficiency estimates have been significantly influenced by the transition to IFRS. However, different consequences are reported for profit and cost efficiency. The paper offers some interesting conclusions on bank efficiency estimates' variation due to an important change in the accounting rules.

Suggested Citation

  • Dimitras, Augustinos I. & Gaganis, Chrysovalantis & Pasiouras, Fotios, 2018. "Financial reporting standards' change and the efficiency measures of EU banks," International Review of Financial Analysis, Elsevier, vol. 59(C), pages 223-233.
    • Handle: RePEc:eee:finana:v:59:y:2018:i:c:p:223-233
    DOI: 10.1016/j.irfa.2018.08.008
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    More about this item

    Keywords

    Bank efficiency; GAAP; IFRS; Stochastic frontier analysis;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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