Are LAC Cooperative and Commercial Banks so Different in Their Management of Non‐Performing Loans?

22 Pages Posted: 28 Apr 2020

Date Written: September 2019

Abstract

This paper assesses technical efficiency in the management of non‐performing loans (NPLs) in the Latin American and Caribbean (LAC) banking industry. To that end, Data Envelopment Analysis techniques are employed with data from the years 2013 to 2016 on a sample of 307 LAC cooperative and commercial banks. Our main contribution to existing literature is that differences of efficiency between cooperative banks and commercial banks are assessed as the result of the different capacities of their managers – managerial efficiency – and the so‐called programme efficiency, which represents differences in the technology used by these two categories of entities. Our principal result suggests that the technology used by cooperative banks in the management of NPLs is more efficient than the technology of commercial banks.

Keywords: Cooperative and commercial banks, Data Envelopment Analysis, Latin American and Caribbean banking industry, non‐performing loans

JEL Classification: C61, G20, L20

Suggested Citation

Jiménez-Hernández, Ignacio and Picazo‐Tadeo, Andrés J. and Sáez‐Fernández, Francisco J., Are LAC Cooperative and Commercial Banks so Different in Their Management of Non‐Performing Loans? (September 2019). Annals of Public and Cooperative Economics, Vol. 90, Issue 3, pp. 419-440, 2019, Available at SSRN: https://ssrn.com/abstract=3586867 or http://dx.doi.org/10.1111/apce.12219

Ignacio Jiménez-Hernández (Contact Author)

University of Granada ( email )

C/Rector López Argueta S/N
Granada, 18071
Spain

Andrés J. Picazo‐Tadeo

affiliation not provided to SSRN

No Address Available

Francisco J. Sáez‐Fernández

University of Granada

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