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Cost and profit efficiency in banking: an international comparison of Europe, Japan and the USA


  • Joaquin Maudos
  • Jose Pastor


This study analyses the cost and profit efficiency of a sample of 14 countries of the European Union, as well as Japan and the USA. The results obtained show that since the start of the 1990s increasing competition has led to gains in profit efficiency in the USA and Europe but not so in the Japanese banking system. The results also show that the inequalities of profitability between countries would be considerably reduced if inefficiency were eliminated, efficiency gains thus being a very important source of improvement in profitability.

Suggested Citation

  • Joaquin Maudos & Jose Pastor, 2001. "Cost and profit efficiency in banking: an international comparison of Europe, Japan and the USA," Applied Economics Letters, Taylor & Francis Journals, vol. 8(6), pages 383-387.
  • Handle: RePEc:taf:apeclt:v:8:y:2001:i:6:p:383-387 DOI: 10.1080/135048501750237829

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    References listed on IDEAS

    1. Lichtenberg, Frank R. & Pottelsberghe de la Potterie, Bruno v., 1998. "International R&D spillovers: A comment," European Economic Review, Elsevier, vol. 42(8), pages 1483-1491, September.
    2. Djankov, Simeon & Hoekman, Bernard, 1998. "Avenues of Technology Transfer: Foreign Investment and Productivity Change in the Czech Republic," CEPR Discussion Papers 1883, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Jose Pastor & Lorenzo Serrano, 2006. "The Effect of Specialisation on Banks' Efficiency: An International Comparison," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(1), pages 125-149.
    2. Elena Loukoianova, 2008. "Analysis of the Efficiency and Profitability of the Japanese Banking System," IMF Working Papers 08/63, International Monetary Fund.
    3. Jacob A. Bikker & Jaap W.B. Bos, 2005. "Trends in Competition and Profitability in the Banking Industry: A Basic Framework," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
    4. Das, Abhiman & Ghosh, Saibal, 2006. "Financial deregulation and efficiency: An empirical analysis of Indian banks during the post reform period," Review of Financial Economics, Elsevier, vol. 15(3), pages 193-221.
    5. Ghosh, Saibal, 2010. "Credit Growth, Bank Soundness and Financial Fragility: Evidence from Indian Banking Sector," MPRA Paper 24715, University Library of Munich, Germany.
    6. Saibal Ghosh, 2015. "Macroprudential regulation and bank behaviour: theory and evidence from a quasi-natural experiment," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 8(1-2), pages 138-159, July.
    7. Barbara Casu & Philip Molyneux, 2003. "A comparative study of efficiency in European banking," Applied Economics, Taylor & Francis Journals, vol. 35(17), pages 1865-1876.
    8. Jaffry, Shabbar & Ghulam, Yaseen & Cox, Joe, 2008. "Labour use efficiency in the Indian and Pakistani commercial banks," Journal of Asian Economics, Elsevier, vol. 19(3), pages 259-293, June.
    9. J.A. Bikker, 2001. "Efficiency and cost differences across countries in a unified European banking market," Research Series Supervision (discontinued) 34, Netherlands Central Bank, Directorate Supervision.
    10. Lucas Mataba & Jehovaness Aikaeli, 2016. "Empirical Analysis of Efficiency of Community Banks in Tanzania," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(12), pages 77-94, December.
    11. Rakesh Mohan, 2005. "Reforms, Productivity, and Efficiency in Banking: The Indian Experience," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 44(4), pages 505-538.
    12. Fotios Pasiouras, 2008. "International evidence on the impact of regulations and supervision on banks’ technical efficiency: an application of two-stage data envelopment analysis," Review of Quantitative Finance and Accounting, Springer, vol. 30(2), pages 187-223, February.
    13. repec:nap:nijefr:2017:p:27-49 is not listed on IDEAS
    14. repec:kap:hcarem:v:21:y:2018:i:1:d:10.1007_s10729-016-9378-y is not listed on IDEAS
    15. Monzur Hossain, 2005. "Can Japan avert any future banking crisis?," Applied Economics Letters, Taylor & Francis Journals, vol. 12(7), pages 425-429.

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