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Cost Efficiency in South Asian Banking: The Impact of Bank Size, State Ownership and Stock Exchange Listings *
Author(s) -
PERERA SHRIMAL,
SKULLY MICHAEL,
WICKRAMANAYAKE J.
Publication year - 2007
Publication title -
international review of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.489
H-Index - 18
eISSN - 1468-2443
pISSN - 1369-412X
DOI - 10.1111/j.1468-2443.2007.00067.x
Subject(s) - stock exchange , cost efficiency , listing (finance) , business , state ownership , sri lanka , monetary economics , stock (firearms) , state owned , banking industry , financial system , economics , finance , emerging markets , market economy , geography , archaeology , operating system , computer science , socioeconomics , tanzania
This study examines the cost efficiency performance of 111 commercial banks in Bangladesh, India, Pakistan and Sri Lanka over 1997–2004. The primary focus is to assess whether bank size, state ownership and stock exchange listing have significant effects on South Asian banks' efficiency performance. To this end, a translog‐form composite‐error cost efficiency model, which allows for exogenous environmental influences, is estimated. The results indicate that the overall efficiency of South Asian banks declined over 1997–2004. Larger banks and banks with widespread ownership through stock exchange listings were found to be relatively more cost efficient. In contrast, state‐owned banks were less efficient.