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Medicion De La Eficiencia Bancaria En Chile A Traves De Fronteras Estocasticas (1990-1999)

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  • SERGIO ZUÑIGA

    ()
    (Escuela de Ingenieria Comercial, Universidad Catolica del Norte)

  • EDUARDO DAGNINO

    (Escuela de Ingenieria Comercial, Universidad Catolica del Norte)

Abstract

We estimate inefficiency for the Chilean banking system in the period 1990-1999 through a sample of 24 national and foreign banks. Estimations indicate that the large banks are closer to their efficient frontiers (or display less x-inefficiency) as compared to the group of very small, small and medium-sized banks, which is consistent with international studies. National and large banks appear to be more efficient. It is exactly the latter group which has reported greater levels of risk and book returns. Also, the group of foreign bank branches displays the greatest levels of inefficiency, practically six times the level detected for national banks. Finally, inefficiency in the national banking system appears more clearly related to book returns that to risk.

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Bibliographic Info

Article provided by Escuela de Administracion. Pontificia Universidad Católica de Chile. in its journal ABANTE.

Volume (Year): 6 (2003)
Issue (Month): 2 ()
Pages: 83-116

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Handle: RePEc:pch:abante:v:6:y:2003:i:2:p:83-116

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Keywords: Banking; Production; Scale economies; Efficiency; Chile;

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References

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  1. Kopp, Raymond J. & Diewert, W. Erwin, 1982. "The decomposition of frontier cost function deviations into measures of technical and allocative efficiency," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 319-331, August.
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  4. Paul W. Bauer & Allen N. Berger & David B. Humphrey, 1991. "Inefficiency and productivity growth in banking: a comparison of stochastic econometric and thick frontier methods," Working Paper 9117, Federal Reserve Bank of Cleveland.
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  7. Isik, Ihsan & Hassan, M. Kabir, 2002. "Technical, scale and allocative efficiencies of Turkish banking industry," Journal of Banking & Finance, Elsevier, vol. 26(4), pages 719-766, April.
  8. Kaparakis, Emmanuel I & Miller, Stephen M & Noulas, Athanasios G, 1994. "Short-Run Cost Inefficiency of Commercial Banks: A Flexible Stochastic Frontier Approach," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(4), pages 875-93, November.
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  10. Simon H. Kwan & Robert A. Eisenbeis, 1995. "An analysis of inefficiencies in banking: a stochastic cost frontier approach," Working Papers in Applied Economic Theory 95-12, Federal Reserve Bank of San Francisco.
  11. Robert A. Eisenbeis & Gary D. Ferrier & Simon H. Kwan, 1999. "The informativeness of stochastic frontier and programming frontier efficiency scores: Cost efficiency and other measures of bank holding company performance," Working Paper 99-23, Federal Reserve Bank of Atlanta.
  12. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
  13. Carlos Budnevich & Helmut Franken & Ricardo Paredes, 2001. "Economías de Escala y Economías de Ámbito en el Sistema Bancario Chileno," Working Papers Central Bank of Chile 93, Central Bank of Chile.
  14. Berger, Allen N. & Hunter, William C. & Timme, Stephen G., 1993. "The efficiency of financial institutions: A review and preview of research past, present and future," Journal of Banking & Finance, Elsevier, vol. 17(2-3), pages 221-249, April.
  15. Rangan, Nanda & Grabowski, Richard & Aly, Hassan Y. & Pasurka, Carl, 1988. "The technical efficiency of US banks," Economics Letters, Elsevier, vol. 28(2), pages 169-175.
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