Profit and cost efficiency in the Italian banking industry (2006-2011)

What is it about?

This study evaluates the cost and the profit efficiency of Italian banking sector over the period 2006-2011. Following the intermediation approach, efficiency scores are computed from estimating a model with three inputs and three outputs. Results show that the average levels of cost and profit efficiency are both around 90%. However, there is high heterogeneity in results. Differences have been found when banks are classified by size (efficiency tends to decrease with size), legal type (cooperatives perform better than others) and area (the best performers are in the North East of the country).

Featured Image