MetaTOC stay on top of your field, easily

Real Effect of Bank Efficiency: Evidence from Disaggregated Manufacturing Sectors


Economica / NEW SERIES

Published online on


In this paper, we investigate the real effect of bank efficiency for the growth and market structure of 23 manufacturing sectors in a two‚Äźdimensional panel framework. We use the cost and profit efficiency scores that are estimated based on the stochastic frontier model for 5850 banks. The robust finding is that industries that rely heavily on external finance grow faster and are enhanced by the creation of new enterprises in countries with efficient banking systems. Further evidence, however, reveals that the efficiency effect is mainly derived from the cost side during the financial crisis period.