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Explaining Efficiency Differences Among Large German and Austrian Banks

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  • David Hauner

Abstract

Cost-efficiency, scale efficiency, and productivity change are estimated by data envelopment analysis; and cost-efficiency is regressed on explanatory variables. No evidence is found for average productivity responding to deregulation over the period studied. State-owned banks are found to be more cost-efficient (likely owing to cheaper funds) and cooperative banks to be about as cost-efficient as private banks. Increasing economies of scale but decreasing economies of scope provide rationale for M&As among banks with similar product portfolios. Interbank and capital market funding is found to be more cost-efficient than deposits when the cost of retail networks is controlled for.

Suggested Citation

  • David Hauner, 2004. "Explaining Efficiency Differences Among Large German and Austrian Banks," IMF Working Papers 04/140, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:04/140
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    References listed on IDEAS

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    Keywords

    Austria; Banks; Germany; efficiency; data envelopment analysis; banking; statistics; linear programming; banking systems;

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