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Is there a Gap in Bank Efficiency between CEE and Western European Countries?

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Author Info
Laurent Weill () (Institut d'Etudes Politiques, LARGE, Université Robert Schuman, 47 avenue de la Forêt-Noire, 67082 Strasbourg Cedex, France.)

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Abstract

This paper aims at comparing the efficiency of banks from Western European countries and Central and Eastern European (CEE) countries to assess the performance gap between both groups of banks. We measure cost efficiency on a sample of 955 banks from 17 European countries with the stochastic frontier approach. We conclude the following: (a) there is a gap in bank efficiency between CEE and Western European countries, (b) this gap was reduced between 1996 and 2000 for most CEE countries, and (c) this gap is partly explained by differences in environment, but not by differences in risk preferences. Comparative Economic Studies (2007) 49, 101–127. doi:10.1057/palgrave.ces.8100183

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Publisher Info
Article provided by Palgrave Macmillan Journals in its journal Comparative Economic Studies.

Volume (Year): 49 (2007)
Issue (Month): 1 (March)
Pages: 101-127
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Handle: RePEc:pal:compes:v:49:y:2007:i:1:p:101-127

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  1. José Pastor & Lorenzo Serrano, 2006. "The Effect of Specialisation on Banks' Efficiency: An International Comparison," International Review of Applied Economics, Taylor and Francis Journals, vol. 20(1), pages 125-149, January. [Downloadable!] (restricted)
  2. Daniel Stavarek, 2005. "Efficiency of Banks in Regions at Different Stage of European Integration Process," Finance 0502020, EconWPA. [Downloadable!]
  3. Anca Podpiera & Jiri Podpiera, 2005. "Deteriorating Cost Efficiency in Commercial Banks Signals an Increasing Risk of Failure," Working Papers 2005/06, Czech National Bank, Research Department. [Downloadable!]
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This page was last updated on 2010-1-3.


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