The Impact of Financial Liberalization on Bank Efficiency: Evidence from Latin America and Asia
36 Pages Posted: 2 May 2007
Date Written: April 2007
This paper investigates the impact of financial liberalization on bank efficiency, using data for a sample of over 4,000 banks from ten emerging economies for the period 1991-2000. We use the DEA approach to calculate bank efficiency at the individual bank level. Bank efficiency measures are then aggregated at the country level to investigate the relationship between financial liberalization and bank efficiency, using a panel least square fixed-effects model. Overall, we find strong support for the positive impact of financial liberalization programmes on bank efficiency.
Keywords: Financial liberalization, bank efficiency, DEA, Asia, Latin America
JEL Classification: G18, G21, O53, O54
Suggested Citation: Suggested Citation