Cost efficiency in the Latin American and Caribbean banking systems

Profit efficiency of banks in Colombia with undesirable output: a directional distance function approach

“…7 To select the relevant market-related and key bank-specific characteristics to be included in the econometric model, we turn to the empirical literature, due to the lack of theoretical explanations concerning the factors that may affect efficiency (see Dietsch and Lozano 2000;Carvallo and Kasman 2005;Ariff and Can 2008). The descriptions of the selected variables are summarized in Table 2.…”

“…The early empirical literature, which analyzed the efficiency and productivity of financial institutions by using either parametric or non-parametric frontier methods, is mainly dominated by studies on the United States and other industrialized countries (Berger and Humphrey 1997;Amel et al 2002, Fiordelisi et al 2011. In recent years, however, great attention has been devoted to analyzing the efficiency and productivity of banking sectors in developing economies (e.g., Carvallo and Kasman 2005;Staikouras et al 2008;Olson and Zoubi 2011;Vu and Nahm 2013) and studying the impact of the macroeconomic environment on banking efficiency (e.g., Drake et al 2006;Sufian 2009), as well as to financial deregulation (e.g., Das and Ghosh 2009;Pasiouras 2009;Barth et al 2013, Chortareas et al 2009 Other studies have explored the effects of bank-specific characteristics on performance by incorporating into the analysis, for example, bank strategy, ownership structure, corporate governance and risk-taking, liquidity levels, capital, and loan-loss provisioning, among other aspects. 3 Loans represent a major share of the total outputs provided by a bank, but as lending involves risk, there is always the possibility for a loan to become non-performing (Chang and Chiu 2006).…”

Size Effect, Seasonality, Attitude to Risk and Performance of Egyptian Banks

“…Concerning with Size Effect (S), Carvallo and Kasman (2005) investigates the cost efficiency of a sample of 481 Latin American and Caribbean banks in 105 countries over the years from 1995 to 1999 using a stochastic frontier model (SFA). They use three inputs: loans, deposits, and other earning assets and three prices of factors of production: the price of labor, the price of purchased funds, and the price of physical capital.…”

Bank efficiency and default risk: The case of Ghana

“…Some studies sought to establish the interrelationship between bank specific variables (size, capital, and liquidity), industry specific variables (market share and concentration), macroeconomic variables (inflation and GDP) and different types of bank efficiency (Kwan and Eisenbeis, 1997;Dietsch and Lozano-Vivas, 2000;Berger and DeYoung, 2001;Chaffai et al, 2001;Carvallo and Kasman, 2005;Williams, 2004;Altunbas et al, 2007;Goddard et al, 2007;Ioannidis et al, 2008;Hughes and Mester, 2009). Some studies also determined the relationship between product diversification, market valuation and risk (Stiroh and Rumble, 2006;Leaven and Levine, 2007;Lepetit et al, 2008).…”