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European integration and banking efficiency: a panel cost frontier approach

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  • Cândida Ferreira

Abstract

The aim of this paper is to contribute to the relatively scarce published research on the relationship between European integration and banking efficiency. Estimating cost translog frontier functions for different panels of European Union countries for the time period 1994- 2008 we conclude that there is always technical inefficiency. Additionally, although country inefficiencies have decreased in recent years (2000-2008), there are no remarkable changes in the countries’ ranking positions. Our results also point to the existence of a quite slow convergence process across EU countries during the period analysed, as well as its acceleration after the establishment of the European Monetary Union.

Suggested Citation

  • Cândida Ferreira, 2011. "European integration and banking efficiency: a panel cost frontier approach," Working Papers Department of Economics 2011/04, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
  • Handle: RePEc:ise:isegwp:wp042011
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    More about this item

    Keywords

    Bank efficiency; European integration; convergence; cost frontier approach.;

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics

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