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Colombian bank efficiency and the role of market structure

dc.creatorFernández-Moreno, Diana Lucía
dc.creatorEstrada, Dairo Ayiber
dc.date.created2013-06-01
dc.date.issued2013-06
dc.identifier.urihttps://repositorio.banrep.gov.co/handle/20.500.12134/2069
dc.description.abstractColombia’s financial system has undertaken major changes during the last decade, with new regulatory regimes being implemented, as well as a significant expansion of financial services. Nevertheless, the recent literature has yet to analyze this new epoch for banking institutions under an efficiency framework. Taking into account the availability of new information and the methodological advances of recent years, our purpose is to study the evolution of bank efficiency during the past few years, as well as to evaluate the influence of some market structure variables on the latter. We find evidence, both under SFA and Order-m, supporting an increase in efficiency over time. Moreover, relating the latter with market structure variables suggests that there is a positive relationship between market power and efficiency; this occurs due to product differentiation, which allows banks to gain in efficiency provided they don’t set excessive credit prices. Nonetheless, there is an open debate concerning the behavior of banks with the highest market shares, since the negative relation between market concentration and efficiency advocates for a "quiet life form", where banks don’t have incentives to fully minimize costs. Additional to these results, we provide evidence of potential impacts that mergers and credit specialization may have on efficiency.
dc.format.extent28 páginas : gráficas, tablas
dc.format.mimetypePDF
dc.language.isoeng
dc.publisherBanco de la República de Colombia
dc.relation.ispartofDocumentos de Trabajo
dc.relation.ispartofseriesTemas de Estabilidad Financiera
dc.relation.isversionofTemas de Estabilidad Financiera ; No. 76
dc.rights.accessRightsOpen Access
dc.rights.urihttps://creativecommons.org/licenses/by-nc-sa/4.0/
dc.subjectEficiencia bancaria
dc.subjectConcentración
dc.subjectPoder de mercado
dc.subjectAnálisis estocástico de frontera
dc.subjectOrden
dc.titleColombian bank efficiency and the role of market structure
dc.typeWorking Paper
dc.subject.jelC14 - Semiparametric and Nonparametric Methods: General
dc.subject.jelD40 - Market Structure, Pricing, and Design: General
dc.subject.jelD61 - Allocative Efficiency; Cost-Benefit Analysis
dc.subject.jelG21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages
dc.audiencePolicymakers
dc.audienceResearchers
dc.audienceStudents
dc.audienceTeachers
dc.subject.keywordBank efficiency
dc.subject.keywordConcentration
dc.subject.keywordMarket power
dc.subject.keywordStochastic frontier analysis
dc.subject.keywordOrder-m
dc.subject.lembInstituciones financieras -- Colombia
dc.subject.lembMercado financiero -- Colombia
dc.subject.lembServicios financieros -- Colombia
dc.subject.lembCrédito -- Colombia
dc.subject.lembPréstamos bancarios -- Colombia
dc.subject.lembFusiones bancarias -- Colombia
dc.type.spaDocumentos de trabajo
dc.rights.spaAcceso abierto
dc.rights.ccAtribucion-NoComercial-CompartirIgual CC BY-NC-SA 4.0
dc.subject.jelspaC14 - Métodos semiparamétricos y no paramétricos: generalidades
dc.subject.jelspaD40 - Estructura de mercado, formación de precios y diseño: Generalidades
dc.subject.jelspaD61 - Eficiencia en la asignación; Análisis coste-beneficio
dc.subject.jelspaG21 - Bancos; Instituciones de depósito; Instituciones Microfinancieras; Hipotecas
dc.type.hasversionPublished Version
dc.coverage.sucursalBogotá
dc.source.bibliographicCitationAigner, D., Lovell, C. & Schmidt (1977), "Formulation and estimation of stochastic frontier production function models", Journal of Econometrics (No. 6, pp 21-37).
dc.source.bibliographicCitationApergis, N. & Alevizopoulou, E. (2011), "Bank efficiency: Evidence from a panel of european banks", Panoeconomicus (No. 3. pp. 329-341).
dc.source.bibliographicCitationBerger, A. & DeYoung, R. (1997), "Problem loans and cost efficiency in commercial banks", Journal of Banking and Finance (No. 21, 849- 870).
dc.relation.doihttps://doi.org/10.32468/tef.76
dc.rights.disclaimerLas opiniones contenidas en el presente documento son responsabilidad exclusiva de los autores y no comprometen al Banco de la República ni a su Junta Directiva.
dc.relation.repechttps://ideas.repec.org/p/bdr/temest/076.html
dc.identifier.handlehttps://hdl.handle.net/20.500.12134/2069
dc.source.handleRepecRePEc:bdr:temest:076


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