Explaining efficiency differences among large German and Austrian banks |
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Authors: | David Hauner |
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Institution: | 1. Research Department , Bank of Israel, Israel;2. Department of Economics , Tel Aviv University , Ramat Aviv , Tel Aviv , 69978 , Israel |
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Abstract: | Cost-efficiency, scale efficiency, and productivity change are estimated by data envelopment analysis; and cost-efficiency is regressed on explanatory variables. No evidence is found for average productivity responding to deregulation over the period studied. State-owned banks are found to be more cost-efficient (likely owing to cheaper funds) and cooperative banks to be about as cost-efficient as private banks. Increasing economies of scale but decreasing economies of scope provide rationale for M&As among banks with similar product portfolios. Interbank and capital market funding is found to be more cost-efficient than deposits when the cost of retail networks is controlled. |
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