Expansion and Efficiency in Banking: Evidence from Ghana
Article first published online: 14 OCT 2011
Copyright © 2011 John Wiley & Sons, Ltd.
Managerial and Decision Economics
Volume 33, Issue 1, pages 19–28, January 2012
How to Cite
Isshaq, Z. and Bokpin, G. A. (2012), Expansion and Efficiency in Banking: Evidence from Ghana. Manage. Decis. Econ., 33: 19–28. doi: 10.1002/mde.1556
- Issue published online: 6 DEC 2011
- Article first published online: 14 OCT 2011
- Banking in Ghana
We use a translog functional form to estimate a stochastic frontier function of cost and profit efficiency (PE) of Ghanaian banks under the Battese–Coelli time-varying decaying inefficiency parameterization for (unbalanced) panel data. We regressed efficiency estimates on a distance variable controlling for bank size, total cost, and profits. We find that Ghanaian bank PE is worsening, whereas cost efficiency is improving for the period analyzed. Our results show that PE is not related to distance, size, or cost and profitability ratios. Distance is however positively and significantly related to cost efficiency. Cost efficiency is however not influenced by size or cost and profit ratios. Copyright © 2011 John Wiley & Sons, Ltd.