Please use this identifier to cite or link to this item: http://buratest.brunel.ac.uk/handle/2438/7099
Title: Financial freedom and bank efficiency: Evidence from the European Union
Authors: Chortareas, GE
Girardone, C
Ventouri, A
Keywords: Economic freedom indexes;Bank efficiency;Data envelopment analysis;Truncated regression;Bootstrap
Issue Date: 2012
Publisher: Brunel University
Citation: Economics and Finance Working Paper, Brunel University, 12-12, Sep 2012
Abstract: This paper investigates the dynamics between the financial freedom counterparts of the economic freedom index drawn from the Heritage Foundation database and bank efficiency levels. We rely on a large sample of commercial banks operating in the 27 European Union member states over the 2000s. After estimating bank-specific efficiency scores using Data Envelopment Analysis (DEA), we develop a truncated regression model combined with bootstrapped confidence intervals to test our main hypotheses. Results suggest that the higher the degree of an economy’s financial freedom, the higher the benefits for banks in terms of cost advantages and overall efficiency. Our results also show that the effects of financial freedom on bank efficiency tend to be more pronounced in countries with freer political systems in which governments formulate and implement sound policies and higher quality governance.
URI: http://bura.brunel.ac.uk/handle/2438/7099
metadata.dc.relation.isreplacedby: 2438/8991
http://bura.brunel.ac.uk/handle/2438/8991
Appears in Collections:Economics and Finance
Publications
Dept of Economics and Finance Research Papers

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