The effect of deregulation on the efficiency of U.S. banking firms

A nonparametric frontier methodology was used to derive measures of efficiency for 669 US banks for the years 1979, 1983, and 1987. The purpose was to compare the efficiency of the sample banks prior to deregulation with the efficiency of the same sample of banks after deregulation. The results indi...

Full description

Saved in:
Bibliographic Details
Published in:Journal of economics and business 1994-02, Vol.46 (1), p.39-54
Main Authors: Grabowski, Richard, Rangan, Nanda, Rezvanian, Rasoul
Format: Article
Language:English
Subjects:
Banking
Banking industry
Banking sector
Comparative studies
Deregulation
Efficiency
Efficiency, Administrative
Regulation
Statistical analysis
United States
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:A nonparametric frontier methodology was used to derive measures of efficiency for 669 US banks for the years 1979, 1983, and 1987. The purpose was to compare the efficiency of the sample banks prior to deregulation with the efficiency of the same sample of banks after deregulation. The results indicate that the overall and allocative efficiency improved from 1979 to 1983, and then declined from 1983 to 1987, Technical, pure technical,and scale efficiency remained unchanged from 1979 to 1983, and then declined from 1983 to 1987. For the entire time period, overall, scale, technical, and pure technical efficiency have declined, with changes in the latter 2 being statistically significant. Finally, the efficiency that did exist in the sample of banks is more the result of technical rather than allocative inefficiency.
ISSN:0148-6195
1879-1735
DOI:10.1016/0148-6195(94)90020-5