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Cost Efficiency in Greek Banking

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Author Info
Nicos C. Kamberoglou () (Bank of Greece, Statistics Department)
Elias Liapis (Bank of Greece, Statistics Department)
George T. Simigiannis (Bank of Greece, Statistics Department)
Panagiota Tzamourani (Bank of Greece, Statistics Department)
Abstract

TThis study uses the distribution free approach to investigate cost efficiency in a panel of Greek banks over 1993-1999, a period characterized by major changes in the banking sector brought about by gradual financial deregulation. These reforms were supposed to provide an opportunity to Greek banks to improve their efficiency and to enhance their competitiveness in view of ongoing financial integration in Europe and the introduction of the euro. The results obtained indicate that important cost X-inefficiencies are in place. Some evidence is provided that bank characteristics such as bank size, type of ownership and risk behaviour do play a role in explaining differences in measured inefficiencies. Scale economies are also examined and the findings indicate that the Greek banking industry experiences economies of scale, though they have declined throughout the observed period. This suggests that competitive viability may be an important factor for further consolidation in the Greek banking industry.

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Publisher Info
Paper provided by Bank of Greece in its series Working Papers with number 09.

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Length: 33 pages
Date of creation: Jan 2004
Date of revision:
Handle: RePEc:bog:wpaper:09

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Related research
Keywords: X-efficiency; scale economies; panel data;

Find related papers by JEL classification:
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages
G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Maudos, Joaquin & Pastor, Jose M. & Perez, Francisco & Quesada, Javier, 2002. "Cost and profit efficiency in European banks," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 12(1), pages 33-58, February. [Downloadable!] (restricted)
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  2. Karafolas, S. & Mantakas, G., 1996. "A note on cost structure and economies of scale in Greek banking," Journal of Banking & Finance, Elsevier, vol. 20(2), pages 377-387, March. [Downloadable!] (restricted)
  3. Mester, Loretta J., 1996. "A study of bank efficiency taking into account risk-preferences," Journal of Banking & Finance, Elsevier, vol. 20(6), pages 1025-1045, July. [Downloadable!] (restricted)
  4. Allen N. Berger & David B. Humphrey, 1997. "Efficiency of financial institutions: international survey and directions for future research," Finance and Economics Discussion Series 1997-11, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
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  5. Lozano-Vivas, Ana, 1998. "Efficiency and Technical Change for Spanish Banks," Applied Financial Economics, Taylor and Francis Journals, vol. 8(3), pages 289-300, June. [Downloadable!] (restricted)
  6. Benston, George J, 1972. "Economies of Scale of Financial Institutions," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 4(2), pages 312-41, May. [Downloadable!] (restricted)
  7. Vander Vennet, Rudi, 2002. "Cost and Profit Efficiency of Financial Conglomerates and Universal Banks in Europe," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 34(1), pages 254-82, February.
  8. Aruna Srinivasan, 1992. "Are there cost savings from bank mergers?," Economic Review, Federal Reserve Bank of Atlanta, issue Mar, pages 17-28.
  9. Allen, Linda & Rai, Anoop, 1996. "Operational efficiency in banking: An international comparison," Journal of Banking & Finance, Elsevier, vol. 20(4), pages 655-672, May. [Downloadable!] (restricted)
  10. George J. Benston & Allen N. Berger & Gerald A. Hanweck & David B. Humphrey, 1983. "Economies of scale and scope in banking," Research Papers in Banking and Financial Economics 64, Board of Governors of the Federal Reserve System (U.S.).
  11. Mester, Loretta J, 1987. " A Multiproduct Cost Study of Savings and Loans," Journal of Finance, American Finance Association, vol. 42(2), pages 423-45, June. [Downloadable!] (restricted)
  12. Eichengreen, Barry & Gibson, Heather D, 2001. "Greek Banking at the Dawn of the New Millennium," CEPR Discussion Papers 2791, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  13. Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-74, October.
  14. Benston, George J & Hanweck, Gerald A & Humphrey, David B, 1982. "Scale Economies in Banking: A Restructuring and Reassessment," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 14(4), pages 435-56, November. [Downloadable!] (restricted)
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  15. 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. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Eleni Angelopoulou, 2005. "The Comparative Performance of Q-type and Dynamic Models of Firm Investment: Empirical Evidence from the UK," Working Papers 27, Bank of Greece. [Downloadable!]
  2. 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!]
  3. Daniel Stavarek, 2005. "Efficiency of Banks in Regions at Different Stage of European Integration Process," Finance 0502020, EconWPA. [Downloadable!]
  4. Delis, Manthos D & Koutsomanoli-Filippaki, Anastasia & Staikouras, Christos & Gerogiannaki, Katerina, 2008. "Evaluating cost and profit efficiency: a comparison of parametric and nonparametric methodologies," MPRA Paper 14039, University Library of Munich, Germany. [Downloadable!]
    Other versions:
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