Measuring Profit Efficiency of Colombian Banks: A Composite Nonstandard Profit Function Approach

We analyze the profit efficiency of the Colombian banking industry during theperiod 2001 - 2013. Unlike previous studies, we estimate revenue and cost efficiencyseparately and then compute profit efficiency as a composite measure of both costand revenue efficiency. This approach overcomes the mis-sp...

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Autores:
Restrepo-Tobón, Diego
Sánchez-González, Jim
Tipo de recurso:
Fecha de publicación:
2018
Institución:
Universidad EAFIT
Repositorio:
Repositorio EAFIT
Idioma:
eng
OAI Identifier:
oai:repository.eafit.edu.co:10784/12965
Acceso en línea:
http://hdl.handle.net/10784/12965
Palabra clave:
Profit Efficiency
Revenue Efficiency
Cost Efficiency
Nonstandard Profit Function
Stochastic Frontier
Rights
License
Acceso abierto
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spelling Medellín de: Lat: 06 15 00 N degrees minutes Lat: 6.2500 decimal degrees Long: 075 36 00 W degrees minutes Long: -75.6000 decimal degrees2018-10-05T19:34:06Z2018-08-272018-10-05T19:34:06Zhttp://hdl.handle.net/10784/12965D24G21G34L13We analyze the profit efficiency of the Colombian banking industry during theperiod 2001 - 2013. Unlike previous studies, we estimate revenue and cost efficiencyseparately and then compute profit efficiency as a composite measure of both costand revenue efficiency. This approach overcomes the mis-specification problems ofthe traditional nonstandard profit function approach used in most of the literatureregarding profit efficiency. We find that profit efficiency improved during the periodunder analysis mainly because gains in revenue efficiency. In addition, and in contrastwith previous studies but in line with economic intuition, we find that while revenue andcost efficiency tend to be negatively correlated, each correlates positively with profitefficiency. Thus, improving either revenue efficiency or cost efficiency has a positiveimpact on profit efficiency.engUniversidad EAFITEscuela de Economía y FinanzasMeasuring Profit Efficiency of Colombian Banks: A Composite Nonstandard Profit Function ApproachworkingPaperinfo:eu-repo/semantics/workingPaperDocumento de trabajo de investigacióndrafthttp://purl.org/coar/version/c_b1a7d7d4d402bccehttp://purl.org/coar/resource_type/c_8042Acceso abiertohttp://purl.org/coar/access_right/c_abf2Profit EfficiencyRevenue EfficiencyCost EfficiencyNonstandard Profit FunctionStochastic Frontierdrestr16@eafit.edu.cojsanch83@eafit.edu.coRestrepo-Tobón, DiegoSánchez-González, JimLICENSElicense.txtlicense.txttext/plain; charset=utf-82556https://repository.eafit.edu.co/bitstreams/64c3fcbf-a1bd-4742-bd6a-d6f1d30db6b4/download76025f86b095439b7ac65b367055d40cMD53ORIGINALWP-2018-12-Diego Restrepo Tobón.pdfWP-2018-12-Diego Restrepo Tobón.pdfDocumento de trabajo de investigaciónapplication/pdf616093https://repository.eafit.edu.co/bitstreams/4f5ec139-1686-4b47-8a8d-e98629ae8bba/downloada4537cbe22f1e723fc91e1b8f525a3fbMD5410784/12965oai:repository.eafit.edu.co:10784/129652024-03-05 14:06:02.417open.accesshttps://repository.eafit.edu.coRepositorio Institucional Universidad EAFITrepositorio@eafit.edu.co
dc.title.eng.fl_str_mv Measuring Profit Efficiency of Colombian Banks: A Composite Nonstandard Profit Function Approach
title Measuring Profit Efficiency of Colombian Banks: A Composite Nonstandard Profit Function Approach
spellingShingle Measuring Profit Efficiency of Colombian Banks: A Composite Nonstandard Profit Function Approach
Profit Efficiency
Revenue Efficiency
Cost Efficiency
Nonstandard Profit Function
Stochastic Frontier
title_short Measuring Profit Efficiency of Colombian Banks: A Composite Nonstandard Profit Function Approach
title_full Measuring Profit Efficiency of Colombian Banks: A Composite Nonstandard Profit Function Approach
title_fullStr Measuring Profit Efficiency of Colombian Banks: A Composite Nonstandard Profit Function Approach
title_full_unstemmed Measuring Profit Efficiency of Colombian Banks: A Composite Nonstandard Profit Function Approach
title_sort Measuring Profit Efficiency of Colombian Banks: A Composite Nonstandard Profit Function Approach
dc.creator.fl_str_mv Restrepo-Tobón, Diego
Sánchez-González, Jim
dc.contributor.eafitauthor.none.fl_str_mv drestr16@eafit.edu.co
jsanch83@eafit.edu.co
dc.contributor.author.none.fl_str_mv Restrepo-Tobón, Diego
Sánchez-González, Jim
dc.subject.keyword.spa.fl_str_mv Profit Efficiency
Revenue Efficiency
Cost Efficiency
Nonstandard Profit Function
Stochastic Frontier
topic Profit Efficiency
Revenue Efficiency
Cost Efficiency
Nonstandard Profit Function
Stochastic Frontier
description We analyze the profit efficiency of the Colombian banking industry during theperiod 2001 - 2013. Unlike previous studies, we estimate revenue and cost efficiencyseparately and then compute profit efficiency as a composite measure of both costand revenue efficiency. This approach overcomes the mis-specification problems ofthe traditional nonstandard profit function approach used in most of the literatureregarding profit efficiency. We find that profit efficiency improved during the periodunder analysis mainly because gains in revenue efficiency. In addition, and in contrastwith previous studies but in line with economic intuition, we find that while revenue andcost efficiency tend to be negatively correlated, each correlates positively with profitefficiency. Thus, improving either revenue efficiency or cost efficiency has a positiveimpact on profit efficiency.
publishDate 2018
dc.date.available.none.fl_str_mv 2018-10-05T19:34:06Z
dc.date.issued.none.fl_str_mv 2018-08-27
dc.date.accessioned.none.fl_str_mv 2018-10-05T19:34:06Z
dc.type.eng.fl_str_mv workingPaper
info:eu-repo/semantics/workingPaper
dc.type.coarversion.fl_str_mv http://purl.org/coar/version/c_b1a7d7d4d402bcce
dc.type.coar.fl_str_mv http://purl.org/coar/resource_type/c_8042
dc.type.local.spa.fl_str_mv Documento de trabajo de investigación
dc.type.hasVersion.eng.fl_str_mv draft
dc.identifier.uri.none.fl_str_mv http://hdl.handle.net/10784/12965
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url http://hdl.handle.net/10784/12965
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dc.language.iso.eng.fl_str_mv eng
language eng
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http://purl.org/coar/access_right/c_abf2
dc.coverage.spatial.eng.fl_str_mv Medellín de: Lat: 06 15 00 N degrees minutes Lat: 6.2500 decimal degrees Long: 075 36 00 W degrees minutes Long: -75.6000 decimal degrees
dc.publisher.spa.fl_str_mv Universidad EAFIT
dc.publisher.department.spa.fl_str_mv Escuela de Economía y Finanzas
institution Universidad EAFIT
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