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Cost Efficiency of the Hong Kong Banking Sector: A Two-Stage DEA Window Analysis
Conference paper   Open access   Peer reviewed

Cost Efficiency of the Hong Kong Banking Sector: A Two-Stage DEA Window Analysis

William R J Alexander, Hien Thu Phan and Sajid Anwar
Proceedings of EcoMod 2016, International Conference on Economic Modeling
EcoMod 2016: International Conference on Economic Modelling (Lisbon, Portugal, 06-Jul-2016–08-Jul-2016)
EcoMod Network
2016
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Abstract

Economic Theory Banking, Finance and Investment cost efficiency banking sector DEA window Hong Kong
The cost efficiency of the Hong Kong Banking sector over the period 2004 to 2014 is estimated by both traditional DEA and DEA window analysis. The two efficiency estimates are highly correlated with each other and both methods indicate an overall decrease in cost efficiency in the middle of the period, coincident with the Global Financial Crisis and, then, some recovery in efficiency. A second stage regression analysis finds that bank size and GDP growth are positively associated with efficiency, whereas revenue diversification and inflation are associated with lower efficiency. Stock exchange listing status appears to be associated with lower efficiency but no clear relationship between measures of market structure and efficiency is found.

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