Working paper
Deregulation and efficiency: the case of private Korean banks
Working papers series (Federal Reserve Bank of Chicago), Vol.WP 99-27
Federal Reserve Bank of Chicago
03/1999
Abstract
This paper examines the productive efficiency of a sample of private Korean banks over the 1985 to 1995 time period. The goal of the analysis is to identify the key determinants of Korean bank efficiency (inefficiency) following the program of deregulation initiated by the government in the early 1980s and augmented in the early 1990s. Using the stochastic frontier cost function approach, efficiency scores were determined for each bank in the sample. A second stage efficiency regression was then estimated to identify the key determinants of operating efficiency. In general, the results show that banks with higher rates of asset growth, fewer employees per million won of assets, larger amounts of core deposits, and lower expense ratios were more efficient. In addition, banks which branched nationwide were found to be more efficient. The financial deregulation of 1991 was found to have had little or no significant effect on the level of sample bank efficiency.
Details
- Title: Subtitle
- Deregulation and efficiency: the case of private Korean banks
- Creators
- Jonathan HaoWilliam Curt HunterWon Keun Yang
- Resource Type
- Working paper
- Publication Details
- Working papers series (Federal Reserve Bank of Chicago), Vol.WP 99-27
- Publisher
- Federal Reserve Bank of Chicago; Chicago, Illinois
- Number of pages
- 39 pages
- Language
- English
- Date posted
- 03/1999
- Academic Unit
- Finance
- Record Identifier
- 9984963127902771
Metrics
1 Record Views