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A nonparametric approach to measurement of efficiency and technological change: The case of large U.S. commercial banks

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Abstract

The purpose of this paper is to derive the efficiency measures and the rate of technological change for a sample of large U.S. commercial banks by employing a nonparametric technique. This technique is used to construct a multiproduct production frontier relative to which the efficiency measures of the banks in the sample are calculated and the displacement of which over time provides a measure of the rate of technological change. The empirical results indicate that the relevant frontier shifted inward between 1980 and 1985 reflecting a high pace of technological advancement achieved by the banks in the sample. The pace varied significantly across the banks with some banks even regressing over time.

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Authors and Affiliations

  1. Department of Economics, Temple University, USA

    Elyas Elyasiani (Associate Professor)

  2. Department of Finance, Temple University, USA

    Seyed M. Mehdian (Assistant Professor)

Authors
  1. Elyas Elyasiani
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  2. Seyed M. Mehdian
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Elyasiani, E., Mehdian, S.M. A nonparametric approach to measurement of efficiency and technological change: The case of large U.S. commercial banks. Journal of Financial Services Research 4, 157–168 (1990). https://doi.org/10.1007/BF00352569

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