Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/83446
Authors: 
Iršová, Zuzana
Year of Publication: 
2010
Series/Report no.: 
IES Working Paper 13/2010
Abstract: 
This article provides an empirical insight on the heterogeneity in the estimates of banking efficiency produced by the stochastic frontier approach. Using data from five countries of Central and Eastern Europe, we study the sensitivity of the efficiency score and the efficiency ranking to a change in the design of the frontier. We found that the average scores are significantly smaller when the transcendental logarithmic functional form is used in the profit efficiency measurement and when the scaling effect is neglected in the cost efficiency measurement. The implied bank ranking is robust to changes in the stochastic frontier definition for cost efficiency, but not for profit efficiency.
Subjects: 
banking
efficiency
stochastic frontier approach
transitional countries
JEL: 
C13
G21
L25
Document Type: 
Working Paper
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