Institutional Reforms, EU Accession, and Bank Efficiency in Transition Economies: Evidence from Bulgaria

Posted: 6 Mar 2011

See all articles by Kiril Tochkov

Kiril Tochkov

Texas Christian University - Department of Economics

Nikolay Nenovsky

Bulgarian National Bank

Date Written: March 5, 2011

Abstract

The paper examines the efficiency of Bulgarian banks and its determinants over the period 1999-2007. The levels of technical, allocative, and cost efficiency are estimated using a non-parametric methodology and then regressed upon a number of bank-specific, institutional, and EU-related factors. The findings indicate that foreign banks were more efficient than domestic private banks, although the gap between them narrowed over time. State-owned banks ranked last but their privatization resulted in efficiency gains. Capitalization, liquidity, and enterprise restructuring enhanced bank efficiency, while banking reforms had an adverse effect. The Treaty of Accession and EU membership were associated with significant efficiency improvements.

Keywords: Transition Economies, Banking, Efficiency, EU Accession, Bulgaria

JEL Classification: C14, G21, P20

Suggested Citation

Tochkov, Kiril and Nenovsky, Nikolay, Institutional Reforms, EU Accession, and Bank Efficiency in Transition Economies: Evidence from Bulgaria (March 5, 2011). Emerging Markets Finance and Trade, Vol. 47, No. 1, 2011, Available at SSRN: https://ssrn.com/abstract=1777904

Kiril Tochkov (Contact Author)

Texas Christian University - Department of Economics ( email )

Box 298510
Fort Worth, TX 76129
United States
817-257-7554 (Phone)
817-257-5058 (Fax)

HOME PAGE: http://personal.tcu.edu/ktochkov

Nikolay Nenovsky

Bulgarian National Bank ( email )

str "St. Sofia" 5
Sofia, 1040
Bulgaria
+ 359 2 9145 1239 (Phone)
+ 359 2 980 24 25 (Fax)

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