VARIATON OF BANKING COST EFFICIENCIES IN CENTRAL ASIA AND MONGOLIA

Year 2016, Issue: 70, 53 - 62, 01.05.2016

Dastan Aseinov

Abstract

In this paper we seek to investigate differences between banking cost efficiencies among commercial banks in Central Asian countries and Mongolia. In analysis different approaches to liberalization and natural resources exporting characteristics of these countries have been focused as one of the main determinants for cost efficiency variation. Cost efficiency scores estimations are based on transcendental logarithmic stochastic frontier panel data model proposed by Battese & Coelli (1995). Dataset used in the study includes period of 2007-2013. Results indicate that less liberalization policy in the banking systems cause low intensity of competition, which in turn characterized by monopolization of banking sectors by large state owned banks. This tendency results in the low efficiency of commercial banks. Monopolization along with the relative abundance of financial resources accumulated through the export of natural resources and constraints on banking activity may lead to a situation described as “quiet life hypothesis”

Keywords

liberalization, frontier efficiency, banking, Central Asia

ВАРИАЦИЯ ЭФФЕКТИВНОСТИ ПО ИЗДЕРЖКАМ В БАНКОВСКИХ СЕКТОРАХ СТРАН ЦЕНТРАЛЬНОЙ АЗИИ И МОНГОЛИИ

Abstract

В данной работе исследованы различия показателей эффективности по издержкам
в банковских секторах стран Центральной Азии и Монголии. В качестве основного
фактора различия эффективности банковской деятельности рассматриваются уровень
либерализации экономики и объем экспорта энергоресурсов. При расчете показателя
эффективности по издержкам банковских секторов был применен метод
стохастического фронтирного анализа на основе транслогарифмической модели,
разработанной Battese & Coelli (1995) для панельных данных. В работе использованы
панельные данные с охватом периода с 2007 по 2013 г. Результаты исследования
показывают, что меньшая либерализация экономики приводит к слабой конкуренции и
монополизации банковского сектора крупными государственными банками и к
низкому уровню эффективности по издержкам банковских секторов. Изобилие
финансовых ресурсов, полученных от экспортирования энергоресурсов и ограничений
в банковской деятельности, может привести к ситуации, объясняемой гипотезой,
известной в литературе как «quiet life hypothesis».

Keywords

либерализация, фронтирная эффективность, банковское дело, Центральная Азия

VARIATON OF BANKING COST EFFICIENCIES IN CENTRAL ASIA AND MONGOLIA

Abstract

In this paper we seek to investigate differences between banking cost efficiencies among
commercial banks in Central Asian countries and Mongolia. In analysis different approaches
to liberalization and natural resources exporting characteristics of these countries have been
focused as one of the main determinants for cost efficiency variation. Cost efficiency scores
estimations are based on transcendental logarithmic stochastic frontier panel data model
proposed by Battese & Coelli (1995). Dataset used in the study includes period of 2007-2013.
Results indicate that less liberalization policy in the banking systems cause low intensity of
competition, which in turn characterized by monopolization of banking sectors by large state
owned banks. This tendency results in the low efficiency of commercial banks.
Monopolization along with the relative abundance of financial resources accumulated
through the export of natural resources and constraints on banking activity may lead to a
situation described as “quiet life hypothesis”.

Keywords

liberalization, frontier efficiency, banking, Central Asia

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