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Bank x-efficiency in Ukraine: An analysis of service characteristics and ownership

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  • Kyj, Larissa
  • Isik, Ihsan

Abstract

This paper investigates managerial and scale x-efficiencies of commercial banks in Ukraine from 1998 to 2003. A large number of banks would suggest competition and efficiency. Ukrainian banks waste half of factor inputs during the production of services by operating off the efficient frontier. Large banks dominate in managerial efficiency; small banks are superior in scale efficiency. Significant numbers of small banks experience increasing returns to scale. Consolidation between small banks may help banks exploit economies of scale and become attractive foreign investment targets. Evidence suggests majority foreign owned joint ventures are optimal formats; banks operating in industrial, politically favored areas outperform others.

Suggested Citation

  • Kyj, Larissa & Isik, Ihsan, 2008. "Bank x-efficiency in Ukraine: An analysis of service characteristics and ownership," Journal of Economics and Business, Elsevier, vol. 60(4), pages 369-393.
  • Handle: RePEc:eee:jebusi:v:60:y:2008:i:4:p:369-393
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    Cited by:

    1. Aiello, Francesco & Bonanno, Graziella, 2014. "On the Sources of Heterogeneity in Banking Efficiency Literature," MPRA Paper 58591, University Library of Munich, Germany.
    2. Francesco Aiello & Graziella Bonanno, 2016. "Efficiency in banking: a meta-regression analysis," International Review of Applied Economics, Taylor & Francis Journals, vol. 30(1), pages 112-149, January.
    3. repec:spr:annopr:v:261:y:2018:i:1:d:10.1007_s10479-017-2628-7 is not listed on IDEAS
    4. E. Nur Ozkan Gunay, 2012. "Risk Incorporation and Efficiency in Emerging Market Banks During the Global Crisis: Evidence from Turkey, 2002-2009," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(S5), pages 91-102, November.
    5. repec:rss:jnljfe:v4i3p4 is not listed on IDEAS
    6. Fadzlan Sufian & Muzafar Shah Habibullah, 2010. "Financial Disruptions and the Evolution of Malaysian Banking Sector’s Efficiency: A Non-Stochastic Frontier Approach," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 166-186.
    7. repec:eee:quaeco:v:66:y:2017:i:c:p:70-99 is not listed on IDEAS
    8. José Luis Carreño & Gino Loyola & Yolanda Portilla, 2010. "Eficiencia Bancaria en Chile: un Enfoque de Frontera de Beneficios," Working Papers Central Bank of Chile 603, Central Bank of Chile.
    9. E. Nur Ozkan Gunay, 2012. "Risk Incorporation and Efficiency in Emerging Market Banks During the Global Crisis: Evidence from Turkey, 2002-2009," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(S5), pages 91-102, November.
    10. Sufian, Fadzlan, 2009. "Determinants of bank efficiency during unstable macroeconomic environment: Empirical evidence from Malaysia," Research in International Business and Finance, Elsevier, vol. 23(1), pages 54-77, January.

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