Operational Efficiecny in the Greek Banking Industry: Evidence from the Stochastic Frontier Approach and Error Decomposition

International Review of Economics and Business (RISEC), Vol. 50, No. 4, 2003

Posted: 24 Jun 2008

See all articles by Nicholas Apergis

Nicholas Apergis

University of Piraeus; University of Derby

Anthony N. Rezitis

affiliation not provided to SSRN

Date Written: 2003

Abstract

The goal of this study is to measure X-efficiency of the banking industry in Greece, through the methodology of a stochastic frontier. The empirical results show that Greek banks are characterized by a significant inefficiency measure, running up to virtually 29%, even following substantial deregulation activities in the monetary sector. In addition, error decomposition tests reveal that the presence of inefficiency is mainly attributed to high operating costs, i.e. administration costs, personnel costs, and loans monitoring costs.

Keywords: Operational efficiency, Banks, Stochastic frontier, Error decompositions, Greece

JEL Classification: G21

Suggested Citation

Apergis, Nicholas and Rezitis, Anthony N., Operational Efficiecny in the Greek Banking Industry: Evidence from the Stochastic Frontier Approach and Error Decomposition (2003). International Review of Economics and Business (RISEC), Vol. 50, No. 4, 2003. Available at SSRN: https://ssrn.com/abstract=1150913

Nicholas Apergis

University of Piraeus ( email )

Karaoli and Dimitriou 80
80 KARAOLI & DIMITRIOU STREET
Piraeus, Attiki 18534
Greece

University of Derby ( email )

Kedleston Road
Derby, Derbyshire DE22 1GB
United Kingdom

Anthony N. Rezitis (Contact Author)

affiliation not provided to SSRN

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