Latin American banking efficiency and use of production factors. Are domestic and foreign banks so different?

Available from: 
September 2012
Paper author(s): 
Francisco Javier Sáez-Fernández (Universidad de Granada)
Andrés J. Picazo-Tadeo (Universidad de Valencia)
Financial Economics

This paper assesses efficiency in Latin American and Caribbean banking, distinguishing between domestic and foreign banks. Scores of both proportional and input-specific technical efficiency are computed using Data Envelopment Analysis (DEA) techniques. Furthermore, the so-called program approach is employed to assess differences in the technology used by domestic and foreign banks. Foreign banks are found to manage all production factors more efficiently; furthermore, this greater efficiency is partly due to the superior technology they use.



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