Technical Efficiency of Large Bank Production in Asia and the Pacific

22 Pages Posted: 1 Jul 2015

See all articles by Milind Sathye

Milind Sathye

University of Canberra - School of Accounting, Banking and Finance; University of Canberra - School of Business and Government

Date Written: June 30, 2015

Abstract

This study investigates the efficiency of large commercial banks in Asia and the Pacific region. In particular, the overall technical efficiency, pure technical efficiency and scale efficiency has been estimated, the factors (including, the environmental factors) that influence efficiency of banks in the region have been explained and the mean efficiency of large banks in different countries of the region has been compared. The study found that when the national frontier was expanded to regional frontier, the efficiency scores declined, the environmental variables had significant influence on efficiency scores and developed countries showed pure technical efficiency score significantly higher than the less developed countries. Hence, going by the global advantage hypothesis a surge in mergers and acquisitions of banks in this region is predicted.

Keywords: bank efficiency, data envelopment analysis, Asia-Pacific

JEL Classification: O2, G2, G21, G28, E58, E61, F33, L5

Suggested Citation

Sathye, Milind, Technical Efficiency of Large Bank Production in Asia and the Pacific (June 30, 2015). Multinational Finance Journal, Vol. 9, No. 1/2, p. 1-22, 2005, Available at SSRN: https://ssrn.com/abstract=2625078

Milind Sathye (Contact Author)

University of Canberra - School of Accounting, Banking and Finance ( email )

Canberra, Australian Capital Territory 2601
Australia

University of Canberra - School of Business and Government

Canberra, ACT 2601
Australia

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