Real Effect of Bank Efficiency: Evidence from Disaggregated Manufacturing Sectors

29 Pages Posted: 20 Dec 2018

See all articles by Ali Mirzaei

Ali Mirzaei

American University of Sharjah

Tomoe Moore

Brunel University London

Date Written: January 2019

Abstract

In this paper, we investigate the real effect of bank efficiency for the growth and market structure of 23 manufacturing sectors in a two‐dimensional panel framework. We use the cost and profit efficiency scores that are estimated based on the stochastic frontier model for 5850 banks. The robust finding is that industries that rely heavily on external finance grow faster and are enhanced by the creation of new enterprises in countries with efficient banking systems. Further evidence, however, reveals that the efficiency effect is mainly derived from the cost side during the financial crisis period.

Suggested Citation

Mirzaei, Ali and Moore, Tomoe, Real Effect of Bank Efficiency: Evidence from Disaggregated Manufacturing Sectors (January 2019). Economica, Vol. 86, Issue 341, pp. 87-115, 2019. Available at SSRN: https://ssrn.com/abstract=3304100 or http://dx.doi.org/10.1111/ecca.12238

Ali Mirzaei (Contact Author)

American University of Sharjah ( email )

P.O. Box 26666
Sharjah
United Arab Emirates

Tomoe Moore

Brunel University London ( email )

Kingston Lane
Uxbridge, Middlesex UB8 3PH
United Kingdom

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