Cost and profit efficiency of banks in Haiti: do domestic banks perform better than foreign banks?
AbstractI use the stochastic frontier methodology to estimate a cost and a profit frontier functions. The Fourier-flexible form is used in this paper because of its flexibility. Results show that, although foreign banks are more cost efficient than domestic banks, domestic banks are more profit efficient than foreign banks, in Haiti. The paper reveals also that, although treasury bills constitute an alternative source of profit for banks in Haiti, a growth of interest rate on treasury bills increases profit efficiency in current period whereas it decreases profit efficiency one period after this growth. The main implication of this paper is that foreign banks are not always more efficient than domestic banks in developing countries, and even in a country with low income level.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 11953.
Date of creation: Jan 2008
Date of revision: Nov 2008
Cost Efficiency; Profit Efficiency; Foreign Banks; Domestic Banks;
Find related papers by JEL classification:
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- N26 - Economic History - - Financial Markets and Institutions - - - Latin America; Caribbean
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-12-14 (All new papers)
- NEP-BAN-2008-12-14 (Banking)
- NEP-EFF-2008-12-14 (Efficiency & Productivity)
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