Working Paper
An analysis of inefficiencies in banking: a stochastic cost frontier approach
Abstract: This paper examines the properties of X-inefficiencies in U.S. banking firms. We find that, after controlling for scale differences, the average small size banking firm is less efficient than the aerate large firm. Smaller firms also exhibit higher variation in X-inefficiencies than their larger counterparts. X-inefficiency on average appears to be declining over time. However, the rank ordering of X-inefficiency is significantly correlated with smaller banking firms' stock returns. ; Published in FRBSF Economic Review (1996 no. 2, p. 16-26)
Keywords: Banks and banking; Risk; Bank holding companies; Bank stocks; Banks and banking - Costs;
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Bibliographic Information
Provider: Federal Reserve Bank of San Francisco
Part of Series: Working Papers in Applied Economic Theory
Publication Date: 1995
Number: 95-12