Prague Economic Papers 2010, 19(4):307-328 | DOI: 10.18267/j.pep.379

Measuring Bank Efficiency: A Meta-Regression Analysis

Zuzana Iršová1, Tomáš Havránek2
1 Charles University in Prague, Institute of Economic Studies (zuzana.irsova@ies-prague.org).
2 Czech National Bank, Economic Research Department, and Charles University in Prague, Institute of Economic Studies (tomas.havranek@ies-prague.org).

This article presents a meta-regression analysis of 32 studies on frontier efficiency measurement in banking, focusing on the sensitivity of the reported estimates to the methodological design. Our findings suggest that study design is crucial for the resulting scores. The differences between the scores estimated using parametric and non-parametric approaches arise when the Fourierflexible functional form is used since this functional form yields lower scores. Generally, the higher the number of observations, the higher is the average estimated efficiency. The removal of scale effects using equity capital increases the profit efficiency but it is insignificant for other scores. The efficiency analysis should distinguish the commercial banking from other bank types because the former tends to deliver lower efficiency scores.

Keywords: banking, meta-analysis, frontier models, efficiency analysis
JEL classification: C13, G21, L25

Published: January 1, 2010  Show citation

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Iršová, Z., & Havránek, T. (2010). Measuring Bank Efficiency: A Meta-Regression Analysis. Prague Economic Papers, 19(4), 307-328. doi: 10.18267/j.pep.379
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