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Effects Of Financial Capital On Colombian Banking Efficiency

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Author Info
Dairo Estrada ()
Poldy Osorio ()
Abstract

In this paper we discuss cost and pro¯t e±ciency for a sample of ¯nancial institutions on the Colombian ¯nancial market in the period 1989-2003, using stochastic frontier e±ciency analysis. During the pe- riod, the cost e±cient frontier deteriorates, but pro¯t e±cient frontier is relatively stable. We found signi¯cant di®erence when we compare the e±ciency scores between types of ¯nancial intermediaries. Addi- tionally, our analysis show that the scores for pro¯t and cost e±ciency have di®erent distribution. We found big di®erences between pro¯t and cost e±ciency among the di®erent type banks. This is evidence in favor of some banks behaving collusively and capturing oligopoly rents.

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Paper provided by BANCO DE LA REPÚBLICA in its series BORRADORES DE ECONOMIA with number 002432.

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Length: 33
Date of creation: 30 Jun 2004
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Handle: RePEc:col:000094:002432

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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.:
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    Other versions:
  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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  1. Dairo Estrada & Angela González Arbelaéz & Javier Gutiérrez Rueda, . "The Effects of Diversification on Banks’ Expected Returns," Borradores de Economia 524, Banco de la Republica de Colombia. [Downloadable!]
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