Abstract

ALMANZA-RAMIREZ, Camilo. Cost Efficiency in the Banking System in Colombia, 1999-2007: A Non-parametric Approach. Innovar [online]. 2012, vol.22, n.44, pp.67-78. ISSN 0121-5051.

A two-phase procedure is used in this article to estimate cost efficiency in the banking system in Colombia and to explore its potential determining factors during the 1999-2007 period. Cost efficiency and its components are calculated in the first phase using the nonparametric technique known as DEA (Data Envelopment Analysis). In the second phase, a Tobit regression is used to examine the influence of the surrounding environment and of certain specific characteristics of each agent on efficiency. The DEA results indicate levels of inefficiency in costs that are not significantly different from international parameters, which, as indicated in the empirical literature, is attributable to inefficiency in allocation. The econometric results show that the observed level of efficiency was significantly influenced by market concentration, the degree of financial depth, the relationship of intermediation and economic growth. Regarding specific variables, only the degree of specialization significantly influenced the observed levels of efficiency.

Keywords : cost efficiency; data envelopment analysis (DEA); Tobit regression.

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