Title: European banking groups' efficiency in a decade: an empirical investigation on the determinants

Authors: Francesca Pampurini; Anna Grazia Quaranta

Addresses: Department of Economic and Social Sciences, Catholic University of Milan, via Emilia Parmense 84, 29122 Piacenza, Italy ' Department of Economics, University of Macerata, via Armaroli 43, 62100 Macerata, Italy

Abstract: After analysing the determinants of the best efficiency levels achieved by the Euro-Area banking groups, this paper suggests some managerial and policy recommendations. We employ a stochastic frontier model to measure the efficiency levels of the banking groups in the period 2009-2018. Then, with a cluster analysis, we identify the most relevant efficiency determinants of the best practice units. The results reveal that the main causes of the high level of efficiency are linked to the business model and to specific managerial choices. These research findings have great micro and macro implications in the light of the structural changes that are transforming the physiognomy of the banking system. Few studies focused on such a particular topic after the 2008 Global Financial Crisis; another strength of this study is that the analysis involves a period able to represent the complexity of the banking and financial markets in the last decade.

Keywords: efficiency; stochastic frontiers; cluster analysis; banking groups; strategic choices.

DOI: 10.1504/IJPQM.2022.124383

International Journal of Productivity and Quality Management, 2022 Vol.36 No.1, pp.110 - 126

Received: 10 Jun 2020
Accepted: 28 Dec 2020
Published online: 26 Jul 2022 *

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