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Discussion Paper Series 2: Banking and Financial Studies, Deutsche Bundesbank >

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dc.contributor.authorKoetter, Michaelen_US
dc.date.accessioned2009-01-28T16:02:46Z-
dc.date.available2009-01-28T16:02:46Z-
dc.date.issued2005en_US
dc.identifier.urihttp://hdl.handle.net/10419/19734-
dc.description.abstractMost bank efficiency studies that use stochastic frontier analysis (SFA) employ each bank's own implicit input price when estimating efficient frontiers. But the theoretical foundation of most studies is a cost minimisation and/ or profit maximisation problem assuming perfect input markets. At the very least, traditional input price proxies therefore contain substantial measurement error. In this paper, we examine the magnitude and direction of this error in cost and profit efficiency (CE and PE) measurement. We suggest two input market definitions to approximate exogenous input prices alternatively and estimate CE and PE of German banks between 1993 and 2003. Our main findings are threefold. First, after accounting for systematic differences across banks, mean CE is sensitive to alternative input prices. Second, distortions of mean PE due to traditional input prices are small. Third, across CE models small cooperative banks located in large western states are identified as top performers. Large banks and those located in eastern states rank lowest.en_US
dc.language.isoengen_US
dc.relation.ispartofseriesDiscussion Paper, Series 2: Banking and Financial Supervision 2005,01en_US
dc.subject.jelC51en_US
dc.subject.jelL11en_US
dc.subject.jelG20en_US
dc.subject.ddc330en_US
dc.subject.keywordGermanyen_US
dc.subject.keywordBanksen_US
dc.subject.keywordcost efficiencyen_US
dc.subject.keywordprofit efficiencyen_US
dc.subject.keywordstochastic frontier analysisen_US
dc.subject.keywordmeasurement erroren_US
dc.subject.stwBanken_US
dc.subject.stwWirtschaftliche Effizienzen_US
dc.subject.stwKostenen_US
dc.subject.stwGewinnen_US
dc.subject.stwSch├Ątzungen_US
dc.subject.stwBenchmarkingen_US
dc.subject.stwFaktorpreisen_US
dc.subject.stwDeutschlanden_US
dc.titleMeasurement matters: Input price proxies and bank efficiency in Germanyen_US
dc.typeWorking Paperen_US
dc.identifier.ppn484583832en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:bubdp2:4256-
Appears in Collections:Discussion Paper Series 2: Banking and Financial Studies, Deutsche Bundesbank

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