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Efficiency of commercial banks in Bulgaria in the wake of EU accession

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  • Kiril Tochkov
  • Nikolay Nenovsky

Abstract

The paper examines the efficiency of Bulgarian banks and its determinants over the period 1999- 2007. The levels of technical, allocative, and cost efficiency are first estimated using a nonparametric methodology and then regressed upon a number of bank-specific, institutional, and EU-related factors. The findings indicate that foreign banks were more efficient than domestic private banks, although the gap between them narrowed over time. State-owned banks ranked last on average but their privatization resulted in efficiency gains. Capitalization, liquid ity, and enterprise restructuring enhanced bank efficiency, while banking reforms had an adverse effect. The Treaty of Accession and EU membership were associated with significant efficiency improvements.

Suggested Citation

  • Kiril Tochkov & Nikolay Nenovsky, 2009. "Efficiency of commercial banks in Bulgaria in the wake of EU accession," ICER Working Papers 21-2009, ICER - International Centre for Economic Research.
    • Handle: RePEc:icr:wpicer:21-2009
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    File URL: http://www.bemservizi.unito.it/repec/icr/wp2009/ICERwp21-09.pdf
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    References listed on IDEAS

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    Cited by:

    1. Fang, Yiwei & Hasan, Iftekhar & Marton, Katherin, 2011. "Bank efficiency in transition economies : recent evidence from South-Eastern Europe," Research Discussion Papers 5/2011, Bank of Finland.
    2. Marek Stefański, 2010. "Banking Sectors in the new European Union Member States," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 4(1), March.
    3. repec:zbw:bofrdp:2011_005 is not listed on IDEAS
    4. Fang, Yiwei & Hasan, Iftekhar & Marton, Katherin, 2011. "Bank efficiency in transition economies: recent evidence from South-Eastern Europe," Bank of Finland Research Discussion Papers 5/2011, Bank of Finland.
    5. Le, Phuong Thanh & Harvie, Charles & Arjomandi, Amir & Borthwick, James, 2019. "Financial liberalisation, bank ownership type and performance in a transition economy: The case of Vietnam," Pacific-Basin Finance Journal, Elsevier, vol. 57(C).

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    More about this item

    Keywords

    Transition economies; Banking sector; Efficiency; EU accession;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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