Efficiency in Italian Commercial Banks: A Stochastic Frontier Analysis

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Cheng, Youwen (2019) Efficiency in Italian Commercial Banks: A Stochastic Frontier Analysis. [Dissertation (University of Nottingham only)]

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Abstract

Finance is an important support for social and economic development. As the core industry of the financial system, the banking industry's steady development is related to the country's financial stability and economic security. Among them, the high efficiency of commercial banks, to some extent, reflects the contribution rate to economic development. Therefore, studying the efficiency of commercial banks is of great significance to the steady development of the national banking industry.

The dissertation selects the relevant data of 168 commercial banks in Italy from 2011 to 2017 for the original sample data, using a combination of theoretical and empirical analysis, qualitative and quantitative combination, transverse and vertical analysis. In addition, this dissertation selects the transcendental log cost function and analyzes the model based on the SFA method to obtain the cost efficiency value and analyze the influencing factors.

Through empirical research, it is found that, the cost efficiency of Italian commercial banks still has room for improvement. The absolute growth of the three major commercial banks in the eyes of the public is not strong enough, and the cost efficiency fluctuates and there is no obvious sign of heightening. Looking at the entire Italian banking industry, the overwhelmed macro economy, insufficiently stable financial policies and high levels of non-performing loans are the three main reasons that hinder the recovery of the Italian banking industry. These problems cannot be solved in one day. The Italian banking industry should maintain sufficient patience and gradually reverse the unfavorable situation in order to seek breakthroughs in the future.

Item Type: Dissertation (University of Nottingham only)
Depositing User: Cheng, Youwen
Date Deposited: 07 Dec 2022 12:44
Last Modified: 07 Dec 2022 12:44
URI: https://eprints.nottingham.ac.uk/id/eprint/58350

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