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Managers and efficiency in banking

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  • Kauko, Karlo

Abstract

This paper presents evidence on the impact of managers on cost efficiency in banking. Stochastic frontier analysis is applied to a unique Finnish data set. The paper finds that manager age and education have strong yet complicated effects. University education enhances efficiency if the manager is running a large bank. Managing director changes are systematically followed by efficiency changes. Manager retirement typically causes an efficiency improvement, whereas other manager changes can either improve or weaken efficiency.

Suggested Citation

  • Kauko, Karlo, 2007. "Managers and efficiency in banking," Bank of Finland Research Discussion Papers 11/2007, Bank of Finland.
    • Handle: RePEc:zbw:bofrdp:rdp2007_011
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    More about this item

    Keywords

    efficiency; banking; managers;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M19 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Other

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