Privatization matters: Bank efficiency in transition countries

Measurement matters – Input price proxies and bank efficiency in Germany

Most bank efficiency studies that use stochastic frontier analysis (SFA) employ each bank’s own implicit input price when estimating efficient frontiers. But the theoretical foundation of most studies is a cost minimisation and/ or profit maximisation problem assuming perfect input markets. At the very least, traditional input price proxies therefore contain substantial measurement error. In th...

Bank Privatization, Finance, and Growth

This paper examines whether privatizing state-owned banks improves finance and economic growth. To do so, we exploit regional banking variation in Russia induced by the idiosyncratic creation of “specialized banks” in the last years of the Soviet Union (1988-91) that were subsequently privatized. Starting in 1999 private banks including surviving spetsbanks emerged as an important source of ext...

Lessons from Bank Privatization in Central Europe

Regulations, Market Power and Bank Efficiency in European Countries

This paper investigates whether different types of regulation may have a direct or indirect (through market power) impact on bank’s efficiency. We use a set of data containing European banks to consider the impact of regulations related to capital requirements, official supervisory power, restrictions on bank activities, and private monitoring on bank efficiency. Our results suggest that offici...

Fiscal Impact of Privatization in Developing Countries