Privatization matters: Bank efficiency in transition countries
To investigate the impact of bank privatization in transition countries, we take the largest banks in six relatively advanced countries, namely, Bulgaria, the Czech Republic, Croatia, Hungary, Poland and Romania. Income and balance sheet characteristics are compared across four bank ownership types. Efficiency measures are computed from stochastic frontiers and used in ownership and privatization regressions having dummy variables for bank type. Our empirical results support the hypotheses that foreign-owned banks are most efficient and government-owned banks are least efficient. In addition, the importance of attracting a strategic foreign owner in the privatization process is confirmed. However, counter to the conjecture that foreign banks cream skim, we find that domestic banks have a local advantage in pursuing fee-for-service business. Finally, we show that both the method and the timing of privatization matter to efficiency; specifically, voucher privatization does not lead to increased efficiency and early-privatized banks are more efficient than later-privatized banks even though we find no evidence of a selection effect.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ewa M. Nikiel & Timothy P. Opiela, 2002. "Customer Type And Bank Efficiency In Poland: Implications For Emerging Market Banking," Contemporary Economic Policy, Western Economic Association International, vol. 20(3), pages 255-271, 07.
- Rafael La Porta & Florencio Lopez-deSilanes & Andrei Shleifer, 2000.
"Government Ownership of Banks,"
Harvard Institute of Economic Research Working Papers
1890, Harvard - Institute of Economic Research.
- La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei, 2001. "Government Ownership of Banks," Working Paper Series rwp01-016, Harvard University, John F. Kennedy School of Government.
- Rafael La Porta & Florencio Lopezde-Silanes & Andrei Shleifer, 2000. "Government Ownership of Banks," NBER Working Papers 7620, National Bureau of Economic Research, Inc.
- Fries, Steven & Taci, Anita, 2005. "Cost efficiency of banks in transition: Evidence from 289 banks in 15 post-communist countries," Journal of Banking & Finance, Elsevier, vol. 29(1), pages 55-81, January.
- Allen N. Berger & Robert DeYoung & Hesna Genay & Gregory F. Udell, 1999.
"Globalization of financial institutions: evidence from cross-border banking performance,"
Working Paper Series
WP-99-25, Federal Reserve Bank of Chicago.
- Allen N. Berger & Robert DeYoung & Hesna Genay & Gregory F. Udell, 2000. "Globalization of financial institutions: evidence from cross-border banking performance," Finance and Economics Discussion Series 2000-04, Board of Governors of the Federal Reserve System (U.S.).
- Steven Fries & Damien Neven & Paul Seabright, 2002.
"Bank Performance in Transition Economies,"
William Davidson Institute Working Papers Series
505, William Davidson Institute at the University of Michigan.
- Bonin, John P. & Hasan, Iftekhar & Wachtel, Paul, 2004.
"Bank performance, efficiency and ownership in transitition countries,"
BOFIT Discussion Papers
7/2004, Bank of Finland, Institute for Economies in Transition.
- Bonin, John P. & Hasan, Iftekhar & Wachtel, Paul, 2005. "Bank performance, efficiency and ownership in transition countries," Journal of Banking & Finance, Elsevier, vol. 29(1), pages 31-53, January.
- Abarbanell, Jeffery S. & Bonin, John P., 1997. "Bank Privatization in Poland: The Case of Bank Slaski," Journal of Comparative Economics, Elsevier, vol. 25(1), pages 31-61, August.
- Bonin, John & Wachtel, Paul, 2004. "Dealing with financial fragility in transition economies," BOFIT Discussion Papers 22/2004, Bank of Finland, Institute for Economies in Transition.
- Clarke, George R. G. & Cull, Robert, 1999.
"Why Privatize? The Case of Argentina's Public Provincial Banks,"
Elsevier, vol. 27(5), pages 865-886, May.
- Clarke, George R. & Cull, Robert, 1998. "Why privatize? : the case of Argentina's public provincial banks," Policy Research Working Paper Series 1972, The World Bank.
- Claessens, Stijn & Demirguc-Kunt, Asl[iota] & Huizinga, Harry, 2001. "How does foreign entry affect domestic banking markets?," Journal of Banking & Finance, Elsevier, vol. 25(5), pages 891-911, May.
- repec:ebd:wpaper:76 is not listed on IDEAS
- Jennifer S. Crystal & B. Gerard Dages & Linda S. Goldberg, 2001. "Does foreign ownership contribute to sounder banks in emerging markets? the Latin American experience," Staff Reports 137, Federal Reserve Bank of New York.
When requesting a correction, please mention this item's handle: RePEc:eee:jbfina:v:29:y:2005:i:8-9:p:2155-2178. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.