The effect of bank reforms and regulation on cost efficiency in emerging economies: A comparative analysis of Egypt and Turkey

Author's Department

Economics Department

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https://doi.org/10.1504/IJEPEE.2011.040916

Document Type

Research Article

Publication Title

International Journal of Economic Policy in Emerging Economies

Publication Date

1-1-2011

doi

10.1504/IJEPEE.2011.040916

Abstract

This research examines the effects of bank reforms and regulatory controls recently enacted by emerging economies on cost efficiency of banks. The Stochastic Frontier Analysis (SFA) is applied to the cases of Turkey and Egypt since both of these emerging markets adopted similar bank reforms directly prior to the global financial meltdown. The results are uniform, proving that banking consolidation and supervision helped improve cost efficiency in both economies. Large banks are the least efficient leading to the conclusion that they are outsized. The most efficient banks are medium-sized, entailing that further bank concentration is apt to intensify diseconomies of scale. Copyright © 2011 Inderscience Enterprises Ltd.

First Page

227

Last Page

244

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