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

Author

Listed:
  • Kiril Tochkov

    () (Department of Economics, Texas Christian University)

  • Nikolay Nenovsk

    () (Department of Economics, University of Orleans and ICER)

Abstract

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.

Suggested Citation

  • Kiril Tochkov & Nikolay Nenovsk, 2010. "Institutional Reforms, EU Accession, and Bank Efficiency: Evidence from Bulgaria," Working Papers 201005, Texas Christian University, Department of Economics.
  • Handle: RePEc:tcu:wpaper:201006
    as

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    File URL: http://www.econ.tcu.edu/RePEc/tcu/wpaper/wp10-02.pdf
    File Function: First version, 2010
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Transition economies; Banking; Efficiency; EU accession;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General

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