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Technical and allocative efficiency in European banking

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Technical and allocative efficiency in European banking. / Brissimis, Sophocles N.; Delis, Manthos D.; Tsionas, Michael.
In: European Journal of Operational Research, Vol. 204, No. 1, 01.07.2010, p. 153-163.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Brissimis, SN, Delis, MD & Tsionas, M 2010, 'Technical and allocative efficiency in European banking', European Journal of Operational Research, vol. 204, no. 1, pp. 153-163. https://doi.org/10.1016/j.ejor.2009.09.034

APA

Brissimis, S. N., Delis, M. D., & Tsionas, M. (2010). Technical and allocative efficiency in European banking. European Journal of Operational Research, 204(1), 153-163. https://doi.org/10.1016/j.ejor.2009.09.034

Vancouver

Brissimis SN, Delis MD, Tsionas M. Technical and allocative efficiency in European banking. European Journal of Operational Research. 2010 Jul 1;204(1):153-163. doi: 10.1016/j.ejor.2009.09.034

Author

Brissimis, Sophocles N. ; Delis, Manthos D. ; Tsionas, Michael. / Technical and allocative efficiency in European banking. In: European Journal of Operational Research. 2010 ; Vol. 204, No. 1. pp. 153-163.

Bibtex

@article{e729aa71ba00488b8b82cf6eea75a5ba,
title = "Technical and allocative efficiency in European banking",
abstract = "This paper specifies an empirical framework for estimating both technical and allocative efficiency using the translog cost-share system, thus providing a solution to the issue known in the literature as the Greene problem. The model is applied to a large panel of European banks and the results are compared with those of a model that does not include an allocative inefficiency term and also with those obtained by using a consistent Bayesian technique. Our results suggest that models which include only technical efficiency, significantly overestimate it, while parameter estimates from the model that includes both technical and allocative efficiency are very close to the ones obtained from the Bayesian approach, thus enhancing our confidence in the proposed methodology. Finally, the fact that allocative efficiency of banks in our sample improves more than technical efficiency underlines the importance of including an allocative inefficiency component in parametric efficiency models.",
keywords = "Technical and allocative efficiency, Translog cost function , Maximum likelihood, European banking",
author = "Brissimis, {Sophocles N.} and Delis, {Manthos D.} and Michael Tsionas",
year = "2010",
month = jul,
day = "1",
doi = "10.1016/j.ejor.2009.09.034",
language = "English",
volume = "204",
pages = "153--163",
journal = "European Journal of Operational Research",
issn = "0377-2217",
publisher = "Elsevier Science B.V.",
number = "1",

}

RIS

TY - JOUR

T1 - Technical and allocative efficiency in European banking

AU - Brissimis, Sophocles N.

AU - Delis, Manthos D.

AU - Tsionas, Michael

PY - 2010/7/1

Y1 - 2010/7/1

N2 - This paper specifies an empirical framework for estimating both technical and allocative efficiency using the translog cost-share system, thus providing a solution to the issue known in the literature as the Greene problem. The model is applied to a large panel of European banks and the results are compared with those of a model that does not include an allocative inefficiency term and also with those obtained by using a consistent Bayesian technique. Our results suggest that models which include only technical efficiency, significantly overestimate it, while parameter estimates from the model that includes both technical and allocative efficiency are very close to the ones obtained from the Bayesian approach, thus enhancing our confidence in the proposed methodology. Finally, the fact that allocative efficiency of banks in our sample improves more than technical efficiency underlines the importance of including an allocative inefficiency component in parametric efficiency models.

AB - This paper specifies an empirical framework for estimating both technical and allocative efficiency using the translog cost-share system, thus providing a solution to the issue known in the literature as the Greene problem. The model is applied to a large panel of European banks and the results are compared with those of a model that does not include an allocative inefficiency term and also with those obtained by using a consistent Bayesian technique. Our results suggest that models which include only technical efficiency, significantly overestimate it, while parameter estimates from the model that includes both technical and allocative efficiency are very close to the ones obtained from the Bayesian approach, thus enhancing our confidence in the proposed methodology. Finally, the fact that allocative efficiency of banks in our sample improves more than technical efficiency underlines the importance of including an allocative inefficiency component in parametric efficiency models.

KW - Technical and allocative efficiency

KW - Translog cost function

KW - Maximum likelihood

KW - European banking

U2 - 10.1016/j.ejor.2009.09.034

DO - 10.1016/j.ejor.2009.09.034

M3 - Journal article

VL - 204

SP - 153

EP - 163

JO - European Journal of Operational Research

JF - European Journal of Operational Research

SN - 0377-2217

IS - 1

ER -