1. Bank efficiency in Latin America
- Fotios Pasiouras
Published Online: 6 MAY 2013
Copyright © 2013 John Wiley & Sons, Ltd.
Efficiency and Productivity Growth: Modelling in the Financial Services Industry
How to Cite
Molyneux, P. and Williams, J. (2013) Bank efficiency in Latin America, in Efficiency and Productivity Growth: Modelling in the Financial Services Industry (ed F. Pasiouras), John Wiley & Sons, Ltd, Chichester, UK. doi: 10.1002/9781118541531.ch1
University of Surrey, UK and Technical University of Crete, Greece
- Published Online: 6 MAY 2013
- Published Print: 6 MAY 2013
Print ISBN: 9781119967521
Online ISBN: 9781118541531
- bank efficiency;
- foreign banks;
- Latin America
This chapter investigates the efficiency features of Latin American banking systems using a variety of effects models that aim to ensure that heterogeneity is not confounded with inefficiency measures. Using a preferred effects model, we find that bank cost efficiency generally deteriorated between 1985–1993 and 1994–2000 and this was particularly pronounced for state-owned institutions. The period up to 2006 experienced widespread foreign bank expansion in the region, reflecting a strengthened economic operating environment with cost efficiency generally improving over this period. Since the 2007 crisis, cost efficiency appears to have either stabilised (foreign-owned banks) or mildly fallen (private banks). An interesting feature of our findings is that de novo foreign bank entry appears to be more cost efficient compared to entry via mergers and acquisition (M&A).