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This paper is, to my knowledge, the first to estimate a stochastic frontier model in which foreign bank ownership interacts with both the frontier and the inefficiency effects. Few studies in this field have focused on countries with a low income level, such as some African and Caribbean nations. This paper considers the case of Haiti, which is an excellent example of a developing economy with a low income level. The results reveal that foreign banks significantly impact both the frontier and the inefficiency effects. Although they enjoy technological progress, compared with domestic banks, foreign banks are less profit efficient.

Cost and profit efficiency of banks in Haiti: do domestic banks perform better than foreign banks?