This paper examines whether institutional differences between countries impact upon the efficient operation of commercial banks. We hypothesize that well developed institutions may affect the adoption of the technology used by banks, and the efficient use of the technology in place. By applying...

This paper develops a non-linear stochastic frontier (SF) model. The main advantage of this model over standard SF models is that the model does not need an assumption for the distributional form of the inefficiency component. Another advantage of the developed model is that it can be used to...

Stochastic frontier models all need an assumption on the distributional form of the efficiency component. Generally this efficiency component is assumed to be half normally, truncated normally, or exponentially distributed. This paper shows that the exponential distribution is, just like the...

The positive relation between financial development and economic growth seems to have weakened in recent years and when analyzing only developed countries. We suggest here that banks' relative ability to intermediate funds cost-efficiently is a quality-based measure of financial development that...

This paper examines the influence of misspecification in stochastic frontier analysis (SFA) models. It explores the impact of misspecification on frontier and efficiency estimates as well as efficiency scores. Using a simulation approach with several data generating processes the general...