| Author: | Dietsch, M. Lozano-Vivas, A. |
| Title: | How the environment determines banking efficiency: A comparison between French and Spanish industries |
| Journal: | Journal of Banking and Finance
2000 : JUN, VOL. 24:6, p. 985-1004 |
| Index terms: | Banking Costs Efficiency France Spain Europe |
| Freeterms: | Distribution Free Approach (DFA) Environmental conditions |
| Language: | eng |
| Abstract: | This paper investigates the influence the environmental conditions have on the cost-efficiency of French and Spanish banking industries. This paper proposes new methodology for cross-country comparisons of efficiency using a parametric approach. In particular, the specific environmental conditions of each country play an important role in the definition and specification of the common frontier of different countries. The paper's results suggest that, without environmental variables, the cost-efficiency scores of Spanish banks are quite low compared to those of the French banks. However, when environmental variables are included in the model, the differences btw. both banking industries are reduced substantially. Overall, the results demonstrate that environmental variables contribute significantly to the difference in efficiency scores btw. the 2 countries. |
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