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Cost Efficiency in Greek Banking

Author

Listed:
  • Nicos C. Kamberoglou

    () (Bank of Greece, Statistics Department)

  • Elias Liapis

    (Bank of Greece, Statistics Department)

  • George T. Simigiannis

    (Bank of Greece, Statistics Department)

  • Panagiota Tzamourani

    (Bank of Greece, Statistics Department)

Abstract

TThis study uses the distribution free approach to investigate cost efficiency in a panel of Greek banks over 1993-1999, a period characterized by major changes in the banking sector brought about by gradual financial deregulation. These reforms were supposed to provide an opportunity to Greek banks to improve their efficiency and to enhance their competitiveness in view of ongoing financial integration in Europe and the introduction of the euro. The results obtained indicate that important cost X-inefficiencies are in place. Some evidence is provided that bank characteristics such as bank size, type of ownership and risk behaviour do play a role in explaining differences in measured inefficiencies. Scale economies are also examined and the findings indicate that the Greek banking industry experiences economies of scale, though they have declined throughout the observed period. This suggests that competitive viability may be an important factor for further consolidation in the Greek banking industry.

Suggested Citation

  • Nicos C. Kamberoglou & Elias Liapis & George T. Simigiannis & Panagiota Tzamourani, 2004. "Cost Efficiency in Greek Banking," Working Papers 09, Bank of Greece.
  • Handle: RePEc:bog:wpaper:09
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    File URL: http://www.bankofgreece.gr/BogEkdoseis/Paper200409.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Gibson, Heather D. & Hall, Stephen G. & Tavlas, George S., 2012. "The Greek financial crisis: Growing imbalances and sovereign spreads," Journal of International Money and Finance, Elsevier, pages 498-516.
    2. Hiona Balfoussia & Heather D. Gibson, 2016. "Financial conditions and economic activity: the potential impact of the targeted long-term refinancing operations (TLTROs)," Applied Economics Letters, Taylor & Francis Journals, pages 449-456.
    3. Manthos Delis & Anastasia Koutsomanoli-Fillipaki & Christos Staikouras & Gerogiannaki Katerina, 2009. "Evaluating cost and profit efficiency: a comparison of parametric and nonparametric methodologies," Applied Financial Economics, Taylor & Francis Journals, pages 191-202.
    4. Daniel Stavarek, 2005. "Efficiency of Banks in Regions at Different Stage of European Integration Process," Finance 0502020, EconWPA.
    5. Sideris, Dimitrios, 2006. "Testing for long-run PPP in a system context: Evidence for the US, Germany and Japan," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 16(2), pages 143-154, April.
    6. George Hondroyiannis & Sophia Lazaretou, 2007. "Inflation persistence during periods of structural change: an assessment using Greek data," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 34(5), pages 453-475, December.
    7. Eleni Angelopoulou, 2005. "The Comparative Performance of Q-type and Dynamic Models of Firm Investment: Empirical Evidence from the UK," Working Papers 27, Bank of Greece.
    8. Nicholas G. Zonzilos, 2004. "Econometric Modelling at the Bank of Greece," Working Papers 14, Bank of Greece.
    9. Giorgos Argitis & Stella Michopoulou, 2013. "Studies in Financial Systems No 4 Financialization and the Greek Financial System," FESSUD studies fstudy04, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    10. Stephen Hall & George Hondroyiannis, 2006. "Measuring the correlation of shocks between the EU15 and the new member countries," Economic Change and Restructuring, Springer, pages 19-34.
    11. Konstantakis, Konstantinos N. & Michaelides, Panayotis G. & Vouldis, Angelos T., 2016. "Non performing loans (NPLs) in a crisis economy: Long-run equilibrium analysis with a real time VEC model for Greece (2001–2015)," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 451(C), pages 149-161.
    12. Anca Podpiera & Jiri Podpiera, 2005. "Deteriorating Cost Efficiency in Commercial Banks Signals an Increasing Risk of Failure," Working Papers 2005/06, Czech National Bank, Research Department.
    13. Manthos Delis & Anastasia Koutsomanoli-Fillipaki & Christos Staikouras & Gerogiannaki Katerina, 2009. "Evaluating cost and profit efficiency: a comparison of parametric and nonparametric methodologies," Applied Financial Economics, Taylor & Francis Journals, pages 191-202.

    More about this item

    Keywords

    X-efficiency; scale economies; panel data;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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