Keywords: Bank, merger, efficiency, profit, cost
Abstract: This paper surveys 130 studies that apply frontier
efficiency analysis to financial
institutions in 21 countries. The primary goals are to summarize
and critically review empirical
estimates of financial institution efficiency and to attempt to
arrive at a consensus view. We find
that the various efficiency methods do not necessarily yield
consistent results, and we suggest some
ways that these methods might be improved to bring about findings
that are more consistent,
accurate, and useful. Secondary goals are to address the
implications of efficiency results for
financial institutions in the areas of government policy,
research, and managerial performance.
Areas needing additional research are also outlined.
Full paper (4627 KB PDF)
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Last update: July 16, 1997