Analysing the Determinants of Bank Efficiency : The Case of Italian Banks

  title={Analysing the Determinants of Bank Efficiency : The Case of Italian Banks},
  author={Claudia Girardone and Philip Molyneux and Edward P. M. Gardener},
This paper investigates the main determinants of Italian banks’ cost efficiency over the period 1993-96, by employing a Fourier-flexible stochastic cost frontier in order to measure X-efficiencies and economies of scale. Quality and riskiness of bank outputs are explicitly accounted for in the cost function and their impact on cost efficiency levels are evaluated. The results show that mean X-inefficiencies range between 13 and 15 per cent of total costs and they tend to decrease over time for… CONTINUE READING
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