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Efficiency and Scale Economies in Transition Economies : Evidence from Poland and the Czech Republic

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  • ADNAN KASMAN

Abstract

This paper examines the cost efficiency and scale economies of banks operating in Poland and the Czech Republic during the period from 1995 to 2000. A common cost frontier with country-specific environmental variables is estimated for a panel of fifty-four banks. A stochastic frontier model is used to estimate the cost efficiency and economies of scale. The results show the importance of environmental variables in the definition and specification of the common frontier. It is found that Polish banks are, on average, more efficient than Czech banks. The results further suggest that foreign banks operating in the Czech banking sector have significantly higher efficiency levels than those of domestic banks. Finally, there is evidence of significant economies of scale for small and medium-sized banks, but diseconomies of scale for large-sized banks.

Suggested Citation

  • Adnan Kasman, 2005. "Efficiency and Scale Economies in Transition Economies : Evidence from Poland and the Czech Republic," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 41(2), pages 60-81, March.
    • Handle: RePEc:mes:emfitr:v:41:y:2005:i:2:p:60-81
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    Citations

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    Cited by:

    1. Mamatzakis, E & kalyvas, a, 2013. "Regulations, Economic Freedom and Bank Performance: Evidence from the EU-10 Economies," MPRA Paper 51878, University Library of Munich, Germany.
    2. Staikouras, Christos & Mamatzakis, Emmanuel & Koutsomanoli-Filippaki, Anastasia, 2008. "Cost efficiency of the banking industry in the South Eastern European region," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 18(5), pages 483-497, December.
    3. Claude Berthomieu & Anastasia Ri, 2009. "Process and Effects of Financial Liberalization in Transition Countries: A Selective Literature Survey," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 56(4), pages 453-473, December.
    4. Adnan Kasman & Saadet Kirbas-Kasman, 2006. "Technical Change in Banking: Evidence From Transition Countries," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 13(1), pages 129-144.
    5. Adnan Kasman & Canan Yildirim, 2006. "Cost and profit efficiencies in transition banking: the case of new EU members," Applied Economics, Taylor & Francis Journals, vol. 38(9), pages 1079-1090.

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