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-Bank Cost Efficiency As Distribution Dynamics: Controlling For Specialization Is Important

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Author Info
Emili Tortosa Ausina () (Universitat Jaume I)
Abstract

This paper analyzes the dynamics of cost efficiency scores in the Spanish banking industry during the period 1985-1995 and asks how such dynamics are influenced by specialization. Efficiency has been estimated through a nonparametric approach, and a model of distributions dynamics has been applied to assess the evolution of efficiency scores over time. Results show that efficiency at industry level (mean efficiency) has increased importantly and that, considering how the entire distribution evolves, there are some important patterns that mean and standard deviation fail in uncovering, like multi-modality. In addition, controlling for each firm¿s output mix sheds mor light on efficiency dynamics, as efficiency scores tend to become closer much faster. El presente trabajo tiene por objeto el estudio de la dinámica de los índices de eficiencia en la industria bancaria española durante el periodo 1985-1995, así como la manera en que dicha dinámica se ve condicionada por la especialización. La eficiencia se estima a través de un enfoque no paramétrico, y se aplica un modelo de dinámica de las distribuciones para valorar la evolución de los índices de eficiencia en el tiempo. Los resultados indican que la eficiencia a nivel de industria (eficiencia media) se ha incrementado y que, considerando la evolución de la totalidad de la distribución, existen patrones importantes imposibles de detectar por la media y la desviación típica, como la multi-modalidad. Asimismo, condicionar por la especialización de cada empresa arroja más luz sobre la dinámica de la eficiencia, pues los índices tienden a aproximarse entre sí más rápidamente.

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File URL: http://www.ivie.es/downloads/docs/wpasec/wpasec-1999-15.pdf
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Publisher Info
Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie EC with number 1999-15.

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Length: 33 pages
Date of creation: Nov 1999
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasec:1999-15

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Related research
Keywords: Bancos; dinámica de la distribución; eficiencia-X; eficiencia en costes. Banking; distribution dynamics; X-efficiency; cost efficiency; product mix.;

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Find related papers by JEL classification:
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages
L5 - Industrial Organization - - Regulation and Industrial Policy

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    Other versions:
  7. Maudos, Joaquin, 1998. "Market Structure and Performance in Spanish Banking Using a Direct Measure of Efficiency," Applied Financial Economics, Taylor and Francis Journals, vol. 8(2), pages 191-200, April. [Downloadable!] (restricted)
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  12. Emili Tortosa Ausina, 1999. "-Convergence In Efficiency Of The Spanish Banking Firms As Distribution Dynamics," Working Papers. Serie EC 1999-14, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
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    Other versions:
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    Other versions:
  17. Quah, Danny T., 1996. "Regional convergence clusters across Europe," European Economic Review, Elsevier, vol. 40(3-5), pages 951-958, April. [Downloadable!] (restricted)
  18. Resti, Andrea, 1997. "Evaluating the cost-efficiency of the Italian Banking System: What can be learned from the joint application of parametric and non-parametric techniques," Journal of Banking & Finance, Elsevier, vol. 21(2), pages 221-250, February. [Downloadable!] (restricted)
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  21. Francisco Pérez García & Emili Tortosa Ausina, 1998. "Product Mix Of The Spanish Banking Firms: Do Competition Clubs Exist?," Working Papers. Serie EC 1998-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
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  24. S Durlauf & Danny Quah, 1998. "The New Empirics of Economic Growth," CEP Discussion Papers dp0384, Centre for Economic Performance, LSE.
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