Explaining Efficiency Differences Among Large German and Austrian Banks

Author/Editor:

David Hauner

Publication Date:

August 1, 2004

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Cost-efficiency, scale efficiency, and productivity change are estimated by data envelopment analysis; and cost-efficiency is regressed on explanatory variables. No evidence is found for average productivity responding to deregulation over the period studied. State-owned banks are found to be more cost-efficient (likely owing to cheaper funds) and cooperative banks to be about as cost-efficient as private banks. Increasing economies of scale but decreasing economies of scope provide rationale for M&As among banks with similar product portfolios. Interbank and capital market funding is found to be more cost-efficient than deposits when the cost of retail networks is controlled for.

Series:

Working Paper No. 2004/140

Subject:

Banking Commercial banks Cooperative banks Productivity State-owned banks

English

Publication Date:

August 1, 2004

ISBN/ISSN:

9781451856156/1018-5941

Stock No:

WPIEA1402004

Pages:

23

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