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Efficiency of financial institutions: International survey and directions for future research

Estimation and inference in two-stage, semi-parametric models of production processes

This article designs a framework for evaluating the causes, consequences, and future implications of financial services industry consolidation, reviews the extant research literature within the context of this framework (over 250 references), and suggests fruitful avenues for future research. The evidence is consistent with increases in market power from some types of consolidation; improvements in profit eAciency and diversification of risks, but little or no cost eAciency improvement on average; relatively little eAect on the availability of services to small customers; potential improvements in payments system eAciency; and potential costs on the financial system from increases in systemic risk or expansion of the financial safety net. ” 1999 Elsevier Science B.V. All rights reserved.

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The consolidation of the financial services industry: Causes, consequences, and implications for the future

A survey of data envelopment analysis in energy and environmental studies

This introductory article reviews past research on the topic of financial institution efficiency, surveys the contributions in this special issue, and suggests how future research on this important topic might proceed.

The efficiency of financial institutions: A review and preview of research past, present and future

In this paper we propose a new technique for incorporating environmental effects and statistical noise into a producer performance evaluation based on data envelopment analysis (DEA). The technique involves a three-stage analysis. In the first stage, DEA is applied to outputs and inputs only, to obtain initial measures of producer performance. In the second stage, stochastic frontier analysis (SFA) is used to regress first stage performance measures against a set of environmental variables. This provides, for each input or output (depending on the orientation of the first stage DEA model), a three-way decomposition of the variation in performance into a part attributable to environmental effects, a part attributable to managerial inefficiency, and a part attributable to statistical noise. In the third stage, either inputs or outputs (again depending on the orientation of the first stage DEA model) are adjusted to account for the impact of the environmental effects and the statistical noise uncovered in the second stage, and DEA is used to re-evaluate producer performance. Throughout the analysis emphasis is placed on slacks, rather than on radial efficiency scores, as appropriate measures of producer performance. An application to nursing homes is provided to illustrate the power of the three-stage methodology.

Accounting for Environmental Effects and Statistical Noise in Data Envelopment Analysis

The ability of a production unit to transform inputs into outputs is influenced by its technical efficiency and external operating environment. This paper introduces a nonparametric, linear programming, frontier procedure for obtaining a measure of managerial efficiency that controls for exogenous features of the operating environment. The approach also provides statistical tests of the effects of external conditions on the efficient use of each individual input (for an input oriented model) or for each individual output (for an output oriented model). The procedure is illustrated for a sample of nursing homes.

Incorporating the Operating Environment Into a Nonparametric Measure of Technical Efficiency

Data envelopment analysis is used to compute a cumulative Malmquist input-based productivity index for coal-burning plants in the U.S. electric generating industry in the 1980s. The authors account for inputs used to control sulfur emissions as well as emissions outputs, and decompose the index into changes in technical efficiency, changes in technology, and changes in scale efficiency. They find that productivity decreased from 1985 to each of their first three target years but grew in the 1985-89 comparison, and that 18.5 percent of their plants, and 27 percent of net generation, lie in the decreasing returns region of the production set. Copyright 1994 by MIT Press.

The effects of sulfur dioxide controls on productivity change in the u.s. electric power industry

In this paper we conduct an empirical exercise in which we attempt to provide answers to three questions concerning credit union mergers: (i) do members of acquiring credit unions benefit from mergers?; (ii) do members of acquired credit unions benefit from mergers?; and (iii) what are the characteristics of relatively successful, and relatively unsuccessful, mergers? Our empirical exercise is based on annual samples of nearly 6000 credit unions, including nearly 300 merger participants, during the 1988–1995 period. We find member service provision to have improved in acquired credit unions, and to have been unchanged in acquiring credit unions. We also provide three separate analyses, from three different perspectives, of the role of various characteristics of merging credit unions in determining the success of mergers.

The impact of mergers on credit union service provision

In this paper we calculate output allocative and technical efficiency for a sample of small banks operating in 1982. We do so by estimating a Shephard type output distance function as a deterministic frontier. In general we find that the banks in our sample are output inefficient.

Suthathip Yaisawarng

Papers

Accounting for Environmental Effects and Statistical Noise in Data Envelopment Analysis

Incorporating the Operating Environment Into a Nonparametric Measure of Technical Efficiency

The effects of sulfur dioxide controls on productivity change in the u.s. electric power industry

The impact of mergers on credit union service provision

Output allocative and technical efficiency of banks