Efficiency Determinants and Dynamic Efficiency Changes in Latin American Banking Industries M
Working Paper 2007-WP-32 December 2007 Efficiency Determinants and Dynamic Efficiency Changes in Latin American Banking Industries M. Kabir Hassan and Benito Sanchez Abstract: This paper investigates the dynamic and the determinants of banking industry efficiency in Latin America. Allocative, technical, pure technical and scale efficiencies are calculated and analyzed in each country. We find that Latin American bank managers have been using resources efficiently, but they are not choosing an optimal input/output. Additionally, we find that traditional banking performance measures are positively correlated with efficiencies while variables that measure banking and financial structure development and macroeconomics present mixed results. About the Authors: Dr. Kabir Hassan is a tenured professor at the University of New Orleans and also holds a visiting research professorship at Drexel University, Philadelphia. He is a financial economist with consulting, research and teaching experiences in development finance, money and capital markets, corporate finance, investments, monetary economics, macroeconomics and international trade and finance. He has published five books, over 70 articles in refereed academic journals and has presented over 100 research papers at professional conferences globally. Dr. Benito Sanchez is an Assistant Professor of Finance at Kean University (Union, NJ.), teaching Corporate Finance, Investment and Financial Institutions and Markets. He has taught finance courses at University of New Orleans and at Loyola University New Orleans. Dr. Sanchez research focuses in asset pricing and banking efficiencies. Keywords: Latin American banks, cost efficiency, revenue efficiency. JEL Classification: D2, G2, G21, G28. The views expressed are those of the individual author(s) and do not necessarily reflect official positions of Networks Financial Institute.
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