Productive efficiency performance of minority and nonminority-owned banks: A nonparametric approach

E Elyasiani, S Mehdian - Journal of Banking & Finance, 1992 - Elsevier
Journal of Banking & Finance, 1992Elsevier
This study examines the efficiency performance of the minority-owned banks (MOBs) as
multiproduct firms relative to that of the nonminority banks (NMOBs) using a highly flexible
nonparametric approach. Since MOBs and NMOBs employ distinct technologies the
efficiency indices for the two groups are derived relative to their respective group-specific
frontiers and are contrasted to shed light on the ownership-efficiency relationship. The MOB
sample is then disaggregated and the intra-group efficiency differentials are investigated …
Abstract
This study examines the efficiency performance of the minority-owned banks (MOBs) as multiproduct firms relative to that of the nonminority banks (NMOBs) using a highly flexible nonparametric approach. Since MOBs and NMOBs employ distinct technologies the efficiency indices for the two groups are derived relative to their respective group-specific frontiers and are contrasted to shed light on the ownership-efficiency relationship. The MOB sample is then disaggregated and the intra-group efficiency differentials are investigated. The findings support the hypothesis that abstracting the regional, regulatory, size, and maturity characteristics of banks, efficiency differentials between MOBs and NMOBs are statistically insignificant.
Elsevier
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