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Determinants of Bank Performance in Transition Countries: A Data Envelopment Analysis

  • Tomas Havranek
  • Zuzana Irsova

    ()

We analyze what drives bank efficiency in the transition countries of Central Europe and compare the results with those for the United States. This paper is one of the few that use data envelopment analysis for the computation of efficiency scores in transition countries, and, to our knowledge, it is the first to explore systematically how different specifications of data envelopment analysis affect the results. Our findings corroborate the common wisdom that foreign-owned banks operating in transition countries are more efficient than domestic banks. While in the United States large banks are in general more efficient, the result for transition countries depends on the design of data envelopment analysis. Copyright CEEUN 2013

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File URL: http://hdl.handle.net/10.1007/s11300-013-0270-x
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Article provided by Springer in its journal Transition Studies Review.

Volume (Year): 20 (2013)
Issue (Month): 1 (April)
Pages: 1-17

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Handle: RePEc:spr:trstrv:v:20:y:2013:i:1:p:1-17
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  1. Berger, Allen N, 1995. "The Profit-Structure Relationship in Banking--Tests of Market-Power and Efficient-Structure Hypotheses," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(2), pages 404-31, May.
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  9. Zuzana Irsova, 2010. "Bank Efficiency in Transitional Countries: Sensitivity to Stochastic Frontier Design," William Davidson Institute Working Papers Series wp998, William Davidson Institute at the University of Michigan.
  10. Thompson, Russell G. & Brinkmann, Emile J. & Dharmapala, P. S. & Gonzalez-Lima, M. D. & Thrall, Robert M., 1997. "DEA/AR profit ratios and sensitivity of 100 large U.S. banks," European Journal of Operational Research, Elsevier, vol. 98(2), pages 213-229, April.
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