Journal of Banking & Finance Vol. 29 No. 1 2005
Cost efficiency of banks in transition: Evidence from 289 banks in 15 post-communist countries
Abstract
To understand the transformation of banking in the post-communist transition, we examine the cost efficiency of 289 banks in 15 East European countries. We find that banking systems in which foreign-owned banks have a larger share of total assets have lower costs and that the association between a country’s progress in banking reform and cost efficiency is non-linear. Early stages of reform are associated with cost reductions, while costs tend to rise at more advanced stages. Private banks are more efficient than state-owned banks, but there are differences among private banks. Privatised banks with majority foreign ownership are the most efficient and those with domestic ownership are the least.
- DOI
- 10.1016/j.jbankfin.2004.06.016
- Volume
- 29
- Issue
- 1
- Pages
- 55-81
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib