Title
Privatization, foreign bank entry and bank efficiency in Croatia: a Fourier-flexible function stochastic cost frontier analysis
Abbreviated Journal Title
Appl. Econ.
Keywords
COMMERCIAL-BANKS; TRANSITION; OWNERSHIP; ECONOMIES; SCALE; COUNTRIES; SCOPE; FORM; Economics
Abstract
Using bank balance sheet data for Croatia for 1994 to 2000, this study estimates a Fourier-flexible frontier cost function. Specification tests indicate that the stochastic frontier model with a Fourier-flexible form with a truncated normal distribution of the inefficiency term allowing for time varying cost efficiency is preferred. The results show that new private and privatized banks, contrary to some expectations, are not the most efficient banks through most of the period. Privatization also does not seem to have an immediate effect on improved efficiency. However, better cost efficiency is associated with a lower likelihood of failure, suggesting that better risk management and better cost management are signs of better management in general. Finally, foreign banks have substantially better efficiency scores than all categories of domestic banks.
Journal Title
Applied Economics
Volume
38
Issue/Number
17
Publication Date
1-1-2006
Document Type
Article
Language
English
First Page
2075
Last Page
2088
WOS Identifier
ISSN
0003-6846
Recommended Citation
"Privatization, foreign bank entry and bank efficiency in Croatia: a Fourier-flexible function stochastic cost frontier analysis" (2006). Faculty Bibliography 2000s. 6316.
https://stars.library.ucf.edu/facultybib2000/6316
Comments
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