Influence of Different Ownership Forms on Efficiency of Czech and Slovak Banks: Stochastic Frontier Approach

The paper presents empirical analysis of influence of different ownership forms on efficiency of Czech and Slovak banks using the Stochastic Frontier Analysis. The paper brings new results as it uses set of data which has not been used previously in the literature. On the set of 44 Czech and 21 Slovak banks in the 1996 - 2005 period we show, that the stochastic specification of cost frontier is justified method for the data. Our main findings are that the structural influences are significant for both countries. Foreign-owned banks are bit more cost efficient than domestic private banks, state-owned banks are significantly less cost efficient when compared to domestic private banks. Extent of inefficiency also depends on the specification of the model.