Volume 16, Issue 4 (2016)                   QJER 2016, 16(4): 37-56 | Back to browse issues page

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Asgari H, Khodarahmi M. Determining the Convergence Speed of Cost Efficiency in the Iranian Banking Industry. QJER. 2016; 16 (4) :37-56
URL: http://ecor.modares.ac.ir/article-18-1397-en.html
1- Associate Professor of Economics, Ilam University
2- MA in Economics
Abstract:   (7357 Views)
Banks as economic firms try to provide banking services in low cost. The efficiency of banking system and its convergence among the Iranian banks is a top priority for planners and decision-makers. In this research, the data of 9 Iranian banks (6 commercial and 3 specialized) during 2001-2012 period are utilized according to intermediate approach and Stochastic Frontier Analysis (SFA) within a translog cost function and Model I of Battese and Colli (1992). The results show that average efficiency for commercial and specialized banks has been 78.95% and 87.58%, respectively, which imply that the average efficiency of specialized banks is more than that of commercial banks. In addition, the convergence process has been studied as a result of economic growth models. The speed of efficiency convergence has been estimated by -571% in absolute   model, and -576% in conditional   model, respectively. The average efficiency growth is decreasing and the efficiency adjustment speed is convergent.
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Article Type: Research Paper | Subject: E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit
Received: 2014/01/22 | Accepted: 2014/11/12 | Published: 2016/11/21

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