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Is there a single frontier in a single European banking market?

  • Bos, J.W.B.
  • Schmiedel, H.

This paper attempts to estimate comparable efficiency scores for European banks operating in the Single Market in the EU. Using a data set of more than 5000 large commercial banks from all major European banking markets over the period 1993-2004, the application of meta-frontiers enables us to assess the existence of a single and integrated European banking market. We find evidence in favor of a single European banking market characterized by cost and profit meta-frontiers. However, compared to the meta-frontier estimations, pooled frontier estimations tend to underestimate efficiency levels and correlate poorly with country-specific frontier efficiency ranks. JEL Classification: G21, L11, L22, L23

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Article provided by Elsevier in its journal Journal of Banking & Finance.

Volume (Year): 31 (2007)
Issue (Month): 7 (July)
Pages: 2081-2102

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Handle: RePEc:eee:jbfina:v:31:y:2007:i:7:p:2081-2102
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