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Allocative and technical efficiency of social banks vis a vis conventional banks

Author

Listed:
  • Emmanuel Mamatzakis

    (Birkbeck College)

  • Christos Triantopoulos

    (Centre of Planning and Economic Research)

Abstract

This paper investigates the technical and allocative efficiency of social banks vis-a-vis conventional banks. We propose a simple modeling approach of stochastic frontier analysis that identifies both allocative and technical efficiency. The estimation is rather cumbersome, and we opt for a simple likelihood function and Maximum Likelihood estimator. We, then, employ a bank-level data set for social banks that provide credit to social firms and conventional banks. Stochastic frontier analysis results are of interest as they show that social banks are underperforming in terms of both technical and allocative inefficiency.

Suggested Citation

  • Emmanuel Mamatzakis & Christos Triantopoulos, 2022. "Allocative and technical efficiency of social banks vis a vis conventional banks," Economics Bulletin, AccessEcon, vol. 42(4), pages 1817-1825.
    • Handle: RePEc:ebl:ecbull:eb-22-00471
    as

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    References listed on IDEAS

    as
    1. Francesca Barigozzi & Piero Tedeschi, 2015. "Credit Markets with Ethical Banks and Motivated Borrowers," Review of Finance, European Finance Association, vol. 19(3), pages 1281-1313.
    2. Kumbhakar, Subal C., 1997. "Modeling allocative inefficiency in a translog cost function and cost share equations: An exact relationship," Journal of Econometrics, Elsevier, vol. 76(1-2), pages 351-356.
    3. Dariya Mykhayliv & Klaus G Zauner, 2018. "The financial and economic performance of social banks," Applied Economics, Taylor & Francis Journals, vol. 50(34-35), pages 3833-3839, July.
    4. Kumbhakar, Subal C. & Tsionas, Efthymios G., 2005. "The Joint Measurement of Technical and Allocative Inefficiencies: An Application of Bayesian Inference in Nonlinear Random-Effects Models," Journal of the American Statistical Association, American Statistical Association, vol. 100, pages 736-747, September.
    5. Mamatzakis, Emmanuel & Tsionas, Mike G. & Kumbhakar, Subal C. & Koutsomanoli-Filippaki, Anastasia, 2015. "Does labour regulation affect technical and allocative efficiency? Evidence from the banking industry," Journal of Banking & Finance, Elsevier, vol. 61(S1), pages 84-98.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Social banks; Technical efficiency; allocative efficiency; Maximum Likelihood.;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics

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