A new method to decompose profit efficiency: an application to US commercial banks

被引:0
作者
Diego A. Restrepo-Tobón
Subal C. Kumbhakar
机构
[1] EAFIT University,
[2] Carrera 49 #7 Sur 50,undefined
[3] Binghamton University,undefined
[4] 4400 Vestal Pkwy E,undefined
[5] University of Stavanger Business School,undefined
来源
Journal of Productivity Analysis | 2017年 / 48卷
关键词
Banking; Profit efficiency; Revenue efficiency; Cost efficiency; Nonstandard profit function; Stochastic frontier; D24; G21; L13;
D O I
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中图分类号
学科分类号
摘要
We propose a new method to estimate profit efficiency which makes explicit how revenue and cost efficiencies contribute to overall profit efficiency. Using data from US commercial banks from 2001 to 2010, we find that losses due to profit inefficiency represent about 3.5% of banks’ equity of which 1% is due to revenue inefficiency and 2.4% to cost inefficiency. Revenue efficiency changes affect more overall profit efficiency than equivalent cost efficiency changes. In contrast to previous studies, but in line with economic intuition, we find that while revenue and cost efficiencies tend to be negatively correlated, both correlate positively with profit efficiency.
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页码:117 / 132
页数:15
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