Measuring cost efficiency of Turkish commercial banks : a stochastic frontier approach

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2013

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Güneş, Hakan

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This study examines cost efficiency of Turkish commercial banks through a stochastic frontier approach where the inefficiency effects are approximated by a set of bank-specific variables. Empirical results reveal that intermediation ratio, deposits divided by liabilities and labor per branch are the main determinants of the inefficiency of Turkish commercial banks. Moreover, it is observed that cost efficiency of all commercial banks has an upward trend until 2008 and it takes 10 quarters to recover from the effects of 2008 economic crisis. On average, medium and foreign banks appear to be the most cost efficient banks within their bank groups. Moreover, while all sub-groups have an upward trend until 2008, each group recovers from the effects of 2008 economic crisis differently. Finally, empirical results reveal further that cost efficiency of commercial banks is persistent.

Subject Keywords

Banks and banking., Financial institutions., Cost accounting.

URI

http://etd.lib.metu.edu.tr/upload/12616281/index.pdf
https://hdl.handle.net/11511/22929

Collections

Graduate School of Social Sciences, Thesis

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Citation Formats

H. Güneş, “Measuring cost efficiency of Turkish commercial banks : a stochastic frontier approach,” M.S. - Master of Science, Middle East Technical University, 2013.