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On the Relationship Between Competition and Efficiency in the EU Banking Sectors
Credit and Capital Markets – Kredit und Kapital, Vol. 37 (2004), Iss. 3 : pp. 329–352
4 Citations (CrossRef)
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Laurent Weill, Strasbourg
Cited By
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Abstract
Evidence is scarce regarding the impact of competition on efficiency in banking, even if it represents a very relevant issue to assess the benefits of a heightened banking competition. This work investigates the relationship between competition and efficiency in banking on a sample of 12 EU countries during the period 1994- 1999. Competition is measured by the Rosse-Panzar H-Statistic, while efficiency is estimated with stochastic frontier approach. We provide support to a negative relationship between competition and efficiency in banking, which does not then corroborate the intuitive positive influence of competition on efficiency. (JEL G21, L12)