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A Bayesian Efficiency Analysis of Angolan Banks
Author(s) -
Barros Carlos Pestana,
Leão Emanuel Reis,
Macanda Nkanga Pedro João,
Mendes Zorro
Publication year - 2016
Publication title -
south african journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.502
H-Index - 31
eISSN - 1813-6982
pISSN - 0038-2280
DOI - 10.1111/saje.12124
Subject(s) - intermediation , stochastic frontier analysis , competition (biology) , frontier , business , banking industry , financial system , foreign ownership , bayesian probability , monetary economics , economics , finance , microeconomics , political science , macroeconomics , statistics , mathematics , ecology , foreign direct investment , production (economics) , law , biology
This article studied the technical efficiency of Angolan banks from 2005 to 2012 using a Bayesian stochastic frontier model. The intermediation approach to banking was adopted. The results revealed that Angolan banks were very efficient and that efficiency varies little among the banks analysed. Furthermore, the differences in efficiency between foreign banks, public banks, large‐sized banks and banks that belong to a local conglomerate were examined. It was concluded that the greatest efficiency was to be found in the case of foreign banks. Since size and conglomerate membership do not seem to lead to greater bank efficiency, it was proposed that Angolan policymakers should promote competition in the banking sector.