Efficiency and market power in Latin American banking

Williams, Jonathan

doi:10.1016/j.jfs.2012.05.001

Cited by 87 publications

(53 citation statements)

References 65 publications

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“…Between these two extremes, there is a combination of the two, using deposits as outputs and inputs, as in Berger and Humprey (), Pasiouras et al . () and Williams (). We label this the hybrid approach.…”

Section: Introductionmentioning

confidence: 99%

On the Sources of Heterogeneity in Banking Efficiency Literature

Aiello

Bonanno

2017

Journal of Economic Surveys

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Abstract. This study reviews the empirical literature on banking efficiency by conducting a meta-regression analysis. The meta-dataset consists of 1661 observations retrieved from 120 papers published over the period [2000][2001][2002][2003][2004][2005][2006][2007][2008][2009][2010][2011][2012][2013][2014]. While the role of study design and method-specific characteristics of primary studies is evaluated, the focus concerns regulation in banking. The results are fourfold. First, parametric methods always yield lower levels of banking efficiency than nonparametric studies. Second, banking efficiency is higher in studies using the value-added approach rather than the intermediation method. Third, efficiency scores also depend on the journal's ranking and on the number of observations and variables used in the primary papers. Finally, regulation matters: primary papers focusing on countries with a liberalized banking industry provide higher values for efficiency scores.

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Section: Introductionmentioning

confidence: 99%

On the Sources of Heterogeneity in Banking Efficiency Literature

Aiello

Bonanno

2017

Journal of Economic Surveys

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“…From the result, competition has a positive and significant relationship with banking efficiency scores and reveals that competition among the banks decreases efficiency. Thus, competition leads to banks operating below their optimal scale, which is inconsistent with the works of Weill (2004), Williams (2012), and Turk-Ariss (2010) in both developed and developing countries.…”

Section: Regression Resultsmentioning

confidence: 82%

Banking efficiency in emerging economies: Does foreign banks entry matter in the Ghanaian context?

et al. 2018

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This study empirically examines the effect of foreign banks entry on banking efficiency scores, using the truncated regression data envelopment analysis model for 25s banks in Ghana, over a 6‐year period (2010–2015). We decompose the efficiency scores into three (technical, cost, and allocative efficiency), and the results indicate that banks in Ghana are marginally inefficient in operating closer to their optimal capacity. The findings show that the input‐oriented model slacks are needed to push an inefficient bank closer to where an efficient bank is positioned. From the results, an immediate and a short‐term entry of foreign banks have a consistent negative relationship with both technical‐ and cost‐efficiency scores whereas long‐term entry of foreign banks shows an inconsistent relationship with the three banking efficiency scores. Thus, the drive towards a positive impact of foreign banks entry on the three efficiency scores is dependent on the form of banking efficiency considered and the interaction term between competitive banking environment (competition) and foreign banks' entry. The study suggests that policymakers and managers in emerging markets should improve on their bank efficiencies in both a competitive banking environment and during periods of foreign bank entry. Moreover, managers of banks should make adjustment to their input resources in order to cope with new banking technologies from foreign bank entry—thereby improving banking efficiencies.

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“…Only a few studies analyse the relationship between financial liberalization and bank efficiency using a multi-country setting (see, e.g. Williams and Nguyen, 2005;Hermes and Vu, 2010;Williams, 2012;Andries and Capraru, 2013). At the same time, however, the number of countries included in these studies remains rather limited.…”

Section: Introductionmentioning

confidence: 99%

Financial liberalization, financial regulation and bank efficiency: a multi-country analysis

Hermes

Meesters

2015

Applied Economics

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This article investigates the impact of financial reforms on bank efficiency. More specifically, we distinguish between two different types of financial reforms, i.e. financial liberalization measures and measures of the quality of bank regulation and supervision (i.e. financial regulation), and study their relationship to bank efficiency separately. Moreover, we analyse whether the impact of financial liberalization on bank efficiency is conditional on the quality of regulation and supervision of the banking system. We apply stochastic frontier analysis to calculate bank efficiency at the individual bank level and use a new and detailed database that measures different aspects of financial reforms. The data-set consists of 87 312 bank-year observations covering 61 countries for the period 1996-2005. Overall, we show that the impact of financial liberalization policies on bank efficiency is conditional on the extent to which bank regulation and supervision has been adopted and developed.

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Efficiency and market power in Latin American banking

Cited by 87 publications

References 65 publications

On the Sources of Heterogeneity in Banking Efficiency Literature

On the Sources of Heterogeneity in Banking Efficiency Literature

Banking efficiency in emerging economies: Does foreign banks entry matter in the Ghanaian context?

Financial liberalization, financial regulation and bank efficiency: a multi-country analysis

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