Does the Entry Mode of Foreign Banks Matter for Bank Efficiency? Evidence from the Czech Republic,Hungary, and Poland
dc.contributor.author | Thi, Ngoc-Anh Vo | en_US |
dc.contributor.author | Vencappa, Dev | en_US |
dc.date.accessioned | 2009-11-17T17:04:18Z | |
dc.date.available | 2009-11-17T17:04:18Z | |
dc.date.issued | 2008-06-01 | en_US |
dc.identifier.other | RePEc:wdi:papers:2008-925 | en_US |
dc.identifier.uri | https://hdl.handle.net/2027.42/64431 | en_US |
dc.description.abstract | This paper investigates the impact of specific modes of entry of foreign banks, i.e. greenfield investment versus merger and acquisition, on bank performance in three transition economies ñ the Czech Republic, Hungary, and Poland. We use stochastic frontier analysis to model and measure the cost efficiency of banks. We adopt a maximum likelihood approach to estimation in which the variance of the one-sided error term is modeled jointly with the cost frontier, thus enabling us to retrieve efficiency scores, as well as estimating the various determinants of X-inefficiency. We first find that foreign banks are generally more cost efficient than their domestic counterparts, a result that confirms those of the existing empirical literature. We then turn our focus to comparative performance of greenfield banks versus merger and acquisition banks (M & As), and of M & As versus domestic banks. The results show that on average, M & As are surpassed in terms of efficiency by greenfields banks, but no cost efficiency difference is apparent between M & As and domestic banks. However, we find a strong age effect with respect to M & As which suggests that the evolution of M & Así efficiency follows an inverse U-shape, that means M & As tend to get more inefficient following the acquisition, but approximately 4 years and a haft later, their efficiency starts to improve. | en_US |
dc.format.extent | 350018 bytes | |
dc.format.extent | 1802 bytes | |
dc.format.mimetype | application/pdf | |
dc.format.mimetype | text/plain | |
dc.relation.ispartofseries | wp925 | en_US |
dc.subject | Banking, Transition Economies, Foreign Bank Entry, Greenfield, Mergers and Acquisitions, Stochastic Frontier Analysis, Cost Efficiency. | en_US |
dc.subject.other | G21, F36, C01. | en_US |
dc.title | Does the Entry Mode of Foreign Banks Matter for Bank Efficiency? Evidence from the Czech Republic,Hungary, and Poland | en_US |
dc.type | Working Paper | en_US |
dc.subject.hlbsecondlevel | Economics | en_US |
dc.subject.hlbtoplevel | Business | en_US |
dc.contributor.affiliationum | William Davidson Institute | en_US |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/64431/1/wp925.pdf | |
dc.contributor.authoremail | nvothi@u-paris10.fr | en_US |
dc.contributor.authoremail | dev.vencappa@nottingham.ac.uk | en_US |
dc.owningcollname | William Davidson Institute (WDI) - Working Papers |
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