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-Bank Cost Efficiency As Distribution Dynamics: Controlling For Specialization Is Important

  • Emili Tortosa Ausina

    ()

    (Universitat Jaume I)

This paper analyzes the dynamics of cost efficiency scores in the Spanish banking industry during the period 1985-1995 and asks how such dynamics are influenced by specialization. Efficiency has been estimated through a nonparametric approach, and a model of distributions dynamics has been applied to assess the evolution of efficiency scores over time. Results show that efficiency at industry level (mean efficiency) has increased importantly and that, considering how the entire distribution evolves, there are some important patterns that mean and standard deviation fail in uncovering, like multi-modality. In addition, controlling for each firm¿s output mix sheds mor light on efficiency dynamics, as efficiency scores tend to become closer much faster. El presente trabajo tiene por objeto el estudio de la dinámica de los índices de eficiencia en la industria bancaria española durante el periodo 1985-1995, así como la manera en que dicha dinámica se ve condicionada por la especialización. La eficiencia se estima a través de un enfoque no paramétrico, y se aplica un modelo de dinámica de las distribuciones para valorar la evolución de los índices de eficiencia en el tiempo. Los resultados indican que la eficiencia a nivel de industria (eficiencia media) se ha incrementado y que, considerando la evolución de la totalidad de la distribución, existen patrones importantes imposibles de detectar por la media y la desviación típica, como la multi-modalidad. Asimismo, condicionar por la especialización de cada empresa arroja más luz sobre la dinámica de la eficiencia, pues los índices tienden a aproximarse entre sí más rápidamente.

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File URL: http://www.ivie.es/downloads/docs/wpasec/wpasec-1999-15.pdf
File Function: Fisrt version / Primera version, 1999
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Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie EC with number 1999-15.

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Length: 33 pages
Date of creation: Nov 1999
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasec:1999-15
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  9. Joaquín Maudos Villarroya, 1996. "Market structure and performance in Spanish banking using a direct measure of efficiency," Working Papers. Serie EC 1996-12, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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  11. José Manuel Pastor Monsálvez, 1995. "Eficiencia, Cambio Productivo Y Cambio Técnico En Los Bancos Y Cajas De Ahorro Españolas: Un Análisis Frontera No Paramétrico," Working Papers. Serie EC 1995-09, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  12. Grifell-Tatje, E. & Lovell, C. A. K., 1997. "The sources of productivity change in Spanish banking," European Journal of Operational Research, Elsevier, vol. 98(2), pages 364-380, April.
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  14. Resti, Andrea, 1997. "Evaluating the cost-efficiency of the Italian Banking System: What can be learned from the joint application of parametric and non-parametric techniques," Journal of Banking & Finance, Elsevier, vol. 21(2), pages 221-250, February.
  15. Danny Quah, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," CEP Discussion Papers dp0280, Centre for Economic Performance, LSE.
  16. Quah, Danny, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," CEPR Discussion Papers 1355, C.E.P.R. Discussion Papers.
  17. Ferrier, Gary D. & Lovell, C. A. Knox, 1990. "Measuring cost efficiency in banking : Econometric and linear programming evidence," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 229-245.
  18. Emili Tortosa Ausina, 1999. "-Convergence In Efficiency Of The Spanish Banking Firms As Distribution Dynamics," Working Papers. Serie EC 1999-14, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  19. Quah, Danny, 1997. "Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," CEPR Discussion Papers 1586, C.E.P.R. Discussion Papers.
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  21. PARK, Byeong & TURLACH, Berwin, 1992. "Practical performance of several data driven bandwidth selectors," CORE Discussion Papers 1992005, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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