An empirical study of bank efficiencies and technology gaps in european banking

Tai Hsin Huang, Li Chih Chiang, Kuan Chen Chen

Research output: Contribution to journalArticle

16 Citations (Scopus)

Abstract

This paper extends the established literature on modeling the cost structures of Europe's banking sectors by combining the Fourier flexible cost function with time-varying technical efficiency (TE) under the framework of the meta-frontier, as proposed by Battese etal. (Journal of Productivity Analysis, Vol. 21 (2004), pp. 91-103) and O'Donnell etal. (Empirical Economics, Vol. 34 (2008), pp. 231-255). We find multiple technologies prevail in the nine sample countries, justifying the use of the meta-cost frontier. Measures TE and technology gap ratios are found to be positively correlated with each other, implying that a relatively technically efficient bank is possibly technologically efficient and vice versa.

Original languageEnglish
Pages (from-to)839-860
Number of pages22
JournalManchester School
Volume79
Issue number4
DOIs
Publication statusPublished - Jul 2011
Externally publishedYes

Fingerprint

Empirical study
European banking
Technology gap
Bank efficiency
Technical efficiency
Cost function
Cost frontier
Banking sector
Metafrontier
Cost structure
Productivity analysis
Economics
Time-varying
Modeling

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

An empirical study of bank efficiencies and technology gaps in european banking. / Huang, Tai Hsin; Chiang, Li Chih; Chen, Kuan Chen.

In: Manchester School, Vol. 79, No. 4, 07.2011, p. 839-860.

Research output: Contribution to journalArticle

Huang, Tai Hsin ; Chiang, Li Chih ; Chen, Kuan Chen. / An empirical study of bank efficiencies and technology gaps in european banking. In: Manchester School. 2011 ; Vol. 79, No. 4. pp. 839-860.
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