Profit efficiency of U.S. commercial banks: a decomposition

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dc.contributor.authorRestrepo, Diego A.
dc.contributor.authorKumbhakar, Subal C.
dc.coverage.spatialMedellín de: Lat: 06 15 00 N degrees minutes Lat: 6.2500 decimal degrees Long: 075 36 00 W degrees minutes Long: -75.6000 decimal degreeseng
dc.creator.emaildrestr16@eafit.edu.cospa
dc.creator.emailkkar@binghamton.eduspa
dc.date.accessioned2013-07-11T21:28:33Z
dc.date.available2013-07-11T21:28:33Z
dc.date.issued2013-06-05
dc.description.abstractThis paper presents new evidence regarding the relation between profit, revenue, and cost efficiencies of U.S. commercial banks. Building on the widely used nonstandard profit function (NSPF) approach, we show (i) why estimation of NSPF would be wrong and (ii) how revenue and cost efficiencies contribute to profit efficiency. Using data from U.S. comercial banks from 2001 to 2010, we find that losses due to profit inefficiency represents about 8.2% of banks’ equity of which 3.5% is due to revenue inefficiency and 4.7% to cost inefficiency. Cost efficiency weighs more than revenue efficiency in estimated profit efficiency. However, compared with cost inefficiency, revenue inefficiency affects more overall profitabilityeng
dc.identifier.jelD24
dc.identifier.jelG21
dc.identifier.jelL13
dc.identifier.urihttp://hdl.handle.net/10784/1000
dc.language.isoengeng
dc.publisherUniversidad EAFITspa
dc.publisher.departmentEscuela de Economía y Finanzasspa
dc.rights.accessrightsinfo:eu-repo/semantics/openAccesseng
dc.rights.localAcceso abiertospa
dc.subject.keywordProfit Efficiencyeng
dc.subject.keywordRevenue efficiencyeng
dc.subject.keywordCost efficiencyeng
dc.subject.keywordNonstandard profit functioneng
dc.subject.keywordStochastic Frontiereng
dc.titleProfit efficiency of U.S. commercial banks: a decompositioneng
dc.typeworkingPapereng
dc.typeinfo:eu-repo/semantics/workingPapereng
dc.type.hasVersiondrafteng
dc.type.localDocumento de trabajo de investigaciónspa

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