Are Commercial Banks Really More Efficient than Agricultural Development Banks? Evidence from Bangladesh
MetadataShow full item record
Publisher:Ohio State University. Department of Agricultural, Environmental, and Development Economics
Series/Report no.:Ohio State University. Department of Agricultural Economics and Rural Sociology. ESO (Economics and Sociology Occasional Paper). No. 2004
Previous studies have argued that commercial banks are more efficient in making and recovering loans than are development banks. Few studies, however, directly compare the efficiency of the two types of banks operating in the same market area. This study in Bangladesh made such a comparison. A normalized profit function was estimated based on the data collected from rural bank branches for the years 1987 and 1988. The results showed that the nationalized commercial bank branches were relative price efficient with respect to wages, while the development bank branches were relative price efficient with respect to deposit interest rates. The development bank branches were relative technical efficient with respect to loans made, while there was no technical efficiency differences between the two bank types with respect to deposits. These results suggest that the issue of relative bank efficiency is unique to each country and cannot be easily generalized.
Rights:This item may be protected by copyright, and is made available here for research and educational purposes. The user is responsible for making a final determination of copyright status. If copyright protection applies, permission must be obtained from the copyright holder to reuse, publish, or reproduce the object beyond the bounds of Fair Use or other exemptions to the law.
Items in Knowledge Bank are protected by copyright, with all rights reserved, unless otherwise indicated.