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Institutional Reforms, EU Accession, and Bank Efficiency: Evidence from Bulgaria

  • Kiril Tochkov

    ()

    (Department of Economics, Texas Christian University)

  • Nikolay Nenovsk

    ()

    (Department of Economics, University of Orleans and ICER)

The paper examines the efficiency of Bulgarian banks and its determinants over the period 1999-2007. The levels of technical, allocative, and cost efficiency are estimated using a non-parametric methodology and then regressed upon a number of bank-specific, institutional, and EU-related factors. The findings indicate that foreign banks were more efficient than domestic private banks, although the gap between them narrowed over time. State-owned banks ranked last but their privatization resulted in efficiency gains. Capitalization, liquidity, and enterprise restructuring enhanced bank efficiency, while banking reforms had an adverse effect. The Treaty of Accession and EU membership were associated with significant efficiency improvements.

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File URL: http://www.econ.tcu.edu/RePEc/tcu/wpaper/wp10-02.pdf
File Function: First version, 2010
Download Restriction: no

Paper provided by Texas Christian University, Department of Economics in its series Working Papers with number 201005.

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Length: 32 pages
Date of creation: Mar 2010
Date of revision:
Handle: RePEc:tcu:wpaper:201006
Contact details of provider: Web page: http://www.econ.tcu.edu/

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  1. H. Semih Yildirim & George Philippatos, 2007. "Efficiency of Banks: Recent Evidence from the Transition Economies of Europe, 1993-2000," The European Journal of Finance, Taylor & Francis Journals, vol. 13(2), pages 123-143.
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  8. Roman Matoušek & Anita Taci, 2005. "Efficiency in Banking: Empirical Evidence from the Czech Republic," Economic Change and Restructuring, Springer, vol. 37(3), pages 225-244, 09.
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  11. Mertens, Alexander & Urga, Giovanni, 2001. "Efficiency, scale and scope economies in the Ukrainian banking sector in 1998," Emerging Markets Review, Elsevier, vol. 2(3), pages 292-308, September.
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  15. Dobrinsky, Rumen, 2000. "The Transition Crisis in Bulgaria," Cambridge Journal of Economics, Oxford University Press, vol. 24(5), pages 581-602, September.
  16. SIMAR, Léopold & WILSON, Paul, 1995. "Sensitivity Analysis to Efficiency Scores : How to Bootstrap in Nonparametric Frontier Models," CORE Discussion Papers 1995043, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  17. Igor Jemric & Boris Vujcic, 2002. "Efficiency of Banks in Croatia: A DEA Approach*," Comparative Economic Studies, Palgrave Macmillan, vol. 44(2-3), pages 169-193, September.
  18. Havrylchyk, Olena, 2006. "Efficiency of the Polish banking industry: Foreign versus domestic banks," Journal of Banking & Finance, Elsevier, vol. 30(7), pages 1975-1996, July.
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