Latin American banking efficiency and use of production factors. Are domestic and foreign banks so different?
This paper assesses efficiency in Latin-American and Caribbean banking, distinguishing between domestic and foreign banks. Scores of both proportional and input-specific technical efficiency are computed using Data Envelopment Analysis (DEA) techniques. Furthermore, the so-called program approach is employed to assess differences in the technology used by domestic and foreign banks. Foreign banks are found to manage all production factors more efficiently; furthermore, this greater efficiency is partly due to the superior technology they use.
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