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Banking Efficiency in Visegrad Countries Before Joining the European Union

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  • Daniel Stavarek

    (Silesian University)

Abstract

This paper is the first attempt to estimate commercial banks’ efficiency in the Visegrad region before joining the EU and also to consider differences in efficiency across the countries. Employing Data Envelopment Analysis, we analyze which of the banking sectors is the most efficient and whether there has been an improvement in banking intermediation efficiency since 1999. Incorporating censored Tobit regression analysis we try to detect whether the cross-country differences should be explained by country specific environmental factors or internal variables such as profitability, size or foreign ownership. Overall, the results suggest that since 1999 there has been, with the exception of Hungary, no improvement in efficiency, and its actual level reaches preferably moderate levels. Efficiency differences among Visegrad banking industries seem to be in the first place determined by country specific factors.

Suggested Citation

  • Daniel Stavarek, 2003. "Banking Efficiency in Visegrad Countries Before Joining the European Union," Finance 0312010, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpfi:0312010
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    References listed on IDEAS

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    Cited by:

    1. Ben Bassem, 2008. "Efficiency of Microfinance Institutions in the Mediterranean: An Application of DEA," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 15(2), pages 343-354, September.
    2. Chortareas, Georgios & Kapetanios, George & Ventouri, Alexia, 2016. "Credit market freedom and cost efficiency in US state banking," Journal of Empirical Finance, Elsevier, vol. 37(C), pages 173-185.
    3. Anca Podpiera & Jiri Podpiera, 2005. "Deteriorating Cost Efficiency in Commercial Banks Signals an Increasing Risk of Failure," Working Papers 2005/06, Czech National Bank, Research and Statistics Department.
    4. Chortareas, Georgios E. & Girardone, Claudia & Ventouri, Alexia, 2012. "Bank supervision, regulation, and efficiency: Evidence from the European Union," Journal of Financial Stability, Elsevier, vol. 8(4), pages 292-302.
    5. Dana Kiselakova & Beata Sofrankova & Miroslava Soltes, 2016. "Analytical View on the Financial and Social Stability within the Euro Area: Empirical Evidence from Slovakia," International Journal of Economics and Financial Issues, Econjournals, vol. 6(4), pages 1637-1645.
    6. Valentin Z. Toci & Iraj Hashi, 2013. "Intermediation Efficiency of Banks in South-East Europe: An Empirical Assessment Using Dea and Malmquist Index," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 2(3), pages 01-20, July.

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    More about this item

    Keywords

    banking efficiency; Visegead countries; Data Envelopment Analysis; Tobit model; banking intermediation;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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