IDEAS home Printed from
   My bibliography  Save this paper

Efficiency of Banks in Regions at Different Stage of European Integration Process


  • Daniel Stavarek

    (Silesian University - School of Business Administration)


This paper estimates commercial banks’ efficiency in three relatively homogenous groups of countries with different level of economic development and different involvement in the process of European integration. The first group consists of Portugal and Greece, the second group is represented by the Czech Republic, Hungary, Poland and Slovakia and the third group includes Bulgaria and Romania. The paper aims to reveal whether the differences among regions and countries in the stage of European integration and economic situation are visible also in banking efficiency. Thus we test the hypothesis that the higher degree of European economic integration and economic development goes hand in hand with higher baking efficiency. Employing Data Envelopment Analysis on unconsolidated data we evaluate efficiency of banks in a core of their business - financial intermediation - in 2002-2003. Results suggest that differences in banking efficiency exist among analyzed regions and the hierarchy corresponds with the hierarchy of regions and countries in terms of economic development and degree of integration. Thus, low level of financial intermediation efficiency in Central and Eastern European countries may undermine their effort to boost the economic growth and catch-up the forerunning countries. The importance of the efficiency gap is underscored by the fact that only some of the catching-up countries recorded higher growth of efficiency than the forerunners.

Suggested Citation

  • Daniel Stavarek, 2005. "Efficiency of Banks in Regions at Different Stage of European Integration Process," Finance 0502020, EconWPA.
  • Handle: RePEc:wpa:wuwpfi:0502020
    Note: Type of Document - pdf; pages: 35

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Ana Lozano Vivas & Jesús Tadeo Pastor Ciurana & José Manuel Pastor Monsálvez, 1997. "Efficiency of European banking systems: A correction by environment variables," Working Papers. Serie EC 1997-12, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    2. Canhoto, Ana & Dermine, Jean, 2003. "A note on banking efficiency in Portugal, New vs. Old banks," Journal of Banking & Finance, Elsevier, vol. 27(11), pages 2087-2098, November.
    3. Ewa M. Nikiel & Timothy P. Opiela, 2002. "Customer Type And Bank Efficiency In Poland: Implications For Emerging Market Banking," Contemporary Economic Policy, Western Economic Association International, vol. 20(3), pages 255-271, July.
    4. Igor Jemric & Boris Vujcic, 2002. "Efficiency of Banks in Croatia: A DEA Approach*," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 44(2-3), pages 169-193, September.
    5. 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.
    6. Berger, Allen N. & Humphrey, David B., 1997. "Efficiency of financial institutions: International survey and directions for future research," European Journal of Operational Research, Elsevier, vol. 98(2), pages 175-212, April.
    7. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    8. Ewa Balcerowicz & Andrzej Bratkowski, 2001. "Restructuring and Development of the Banking Sector in Poland. Lessons to be Learnt by Less Advanced Transition Countries," CASE Network Reports 0044, CASE-Center for Social and Economic Research.
    9. David A Grigorian & Vlad Manole, 2006. "Determinants of Commercial Bank Performance in Transition: An Application of Data Envelopment Analysis," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 48(3), pages 497-522, September.
    10. Bonin, John P. & Hasan, Iftekhar & Wachtel, Paul, 2005. "Bank performance, efficiency and ownership in transition countries," Journal of Banking & Finance, Elsevier, vol. 29(1), pages 31-53, January.
    11. Hasan, Iftekhar & Marton, Katherin, 2003. "Development and efficiency of the banking sector in a transitional economy: Hungarian experience," Journal of Banking & Finance, Elsevier, vol. 27(12), pages 2249-2271, December.
    12. Laurent Weill, 2007. "Is there a Gap in Bank Efficiency between CEE and Western European Countries?," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 49(1), pages 101-127, March.
    13. Sherman, H. David & Gold, Franklin, 1985. "Bank branch operating efficiency : Evaluation with Data Envelopment Analysis," Journal of Banking & Finance, Elsevier, vol. 9(2), pages 297-315, June.
    14. McAllister, Patrick H. & McManus, Douglas, 1993. "Resolving the scale efficiency puzzle in banking," Journal of Banking & Finance, Elsevier, vol. 17(2-3), pages 389-405, April.
    15. 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.
    16. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    17. Berg, Sigbjorn Atle & Forsund, Finn R. & Hjalmarsson, Lennart & Suominen, Matti, 1993. "Banking efficiency in the Nordic countries," Journal of Banking & Finance, Elsevier, vol. 17(2-3), pages 371-388, April.
    18. Nicos C. Kamberoglou & Elias Liapis & George T. Simigiannis & Panagiota Tzamourani, 2004. "Cost Efficiency in Greek Banking," Working Papers 09, Bank of Greece.
    19. Fries, Steven & Taci, Anita, 2005. "Cost efficiency of banks in transition: Evidence from 289 banks in 15 post-communist countries," Journal of Banking & Finance, Elsevier, vol. 29(1), pages 55-81, January.
    20. Malgorzata Pawlowska, 2003. "The Impact of M&A on Technical Efficiency, Scale Efficiency and Productivity Change in the Polish Banking Sector: a Non-Parametric Approach," NBP Working Papers 29, Narodowy Bank Polski, Economic Research Department.
    21. Christopoulos, Dimitris K. & Lolos, Sarantis E. G. & Tsionas, Efthymios G., 2002. "Efficiency of the Greek banking system in view of the EMU: a heteroscedastic stochastic frontier approach," Journal of Policy Modeling, Elsevier, vol. 24(9), pages 813-829, December.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Mathur Somesh, 2007. "Indian IT and ICT Industry: A Performance Analysis Using Data Envelopment Analysis and Malmquist Index," Global Economy Journal, De Gruyter, vol. 7(2), pages 1-42, June.
    2. Mamatzakis, E & kalyvas, a, 2013. "Regulations, Economic Freedom and Bank Performance: Evidence from the EU-10 Economies," MPRA Paper 51878, University Library of Munich, Germany.
    3. Mathur, Somesh Kumar, 2007. "Indian IT industry: a performance analysis and a model for possible adoption," MPRA Paper 2368, University Library of Munich, Germany.

    More about this item


    efficiency; banks; Data Envelopment Analysis; integration;

    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

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpfi:0502020. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.