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An Efficiency Analysis of Banking Systems: A Comparison of European and United States Large Commercial Banks Using Different Functional Forms

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Author Info

  • Maggi, Bernardo

    (University of Roma "La Sapienza")

  • Rossi, Stefania P.S.

    ()
    (University of Cagliari, University of Vienna)

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    Abstract

    This paper aims at investigating the efficiency of European and U.S. commercial banks. Scale and scope economies indicators, as well as a measurement of X-efficiency are derived from three cost functions: Fourier flexible form, translog and Box-Cox. This allows checking the stability and the robustness of the evidence across the different specifications. Our results over the period 1995-98 show that overall the average cost curve is relatively flat with some evidence of scale efficiency gains. More puzzling are the results on the presence of scope economies.

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    File URL: http://www.intech.unu.edu/publications/eifc-tf-papers/eifc03-35.pdf
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    Bibliographic Info

    Paper provided by United Nations University, Institute for New Technologies in its series EIFC - Technology and Finance Working Papers with number 35.

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    Date of creation: 2003
    Date of revision:
    Handle: RePEc:dgr:unutaf:eifc03-35

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    Web page: http://www.intech.unu.edu

    Related research

    Keywords: European and U.S. commercial banks; cost efficiency; scale and scope economies; Translog and Fourier flexible cost function; Box-Cox;

    This paper has been announced in the following NEP Reports:

    References

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    Cited by:
    1. Santos José O. Dacanay III, 2010. "The evolution of cost and profit efficiency of Philippine commercial banks," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 47(1), pages 109-146, June.

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