Abstract
The focus of our research is on the Romanian banking sector, analysing if, over the period 2002 to 2009, foreign banks have been more efficient than their domestic peers, as foreign banks can benefit from the experience and superior know-how of their parent banks and thus achieve a superior organisation and management process. To reach this aim, we have used the Data Envelopment Analysis approach, estimating the cost, allocative, technical, pure technical and scale efficiencies; and afterwards we have conducted also a series of parametric and nonparametric tests in order to establish if foreign and domestic banks are coming from the same population. The results of the paper underline the fact that in the Romanian banking market, foreign banks are truly more efficient than the domestic ones for being able to better use their advantages and obtain a higher productivity of their inputs. Moreover, during the researched period the efficiency of the banking sector has not been improved, mainly as a consequence of the financial crisis.
Highlights
The role of foreign banks in the banking sectors of the new member states represents an ongoing debate, Romania being no exception to this
The focus of our research is on the Romanian banking sector, analysing if, over the period 2002 to 2009, foreign banks have been more efficient than their domestic peers, as foreign banks can benefit from the experience and superior know-how of their parent banks and achieve a superior organisation and management process
The aim of this paper is to investigate if foreign banks present in the Romanian banking market between 2002 and 2009 have been more efficient than their domestic peers, as foreign banks can benefit from the experience and superior know-how of their parent banks and achieve a superior organisation and management process
Summary
The role of foreign banks in the banking sectors of the new member states represents an ongoing debate, Romania being no exception to this. Most studies underline the fact that in developed banking sectors foreign banks tend to register a lower degree of efficiency than domestic banks. Even if the literature on this subject is relatively smaller in the case of new European Union member states than the one dedicated to the EU-15 countries, there are several studies which support the idea that foreign banks in these countries are Journal of Eastern Europe Research in Business & Economics 2 more efficient than domestic banks (Grigorian and Manole, 2002; Hasan and Marton, 2003; Havrylchyk, 2005; Dardac and Boitan, 2008; Toçi, 2009). A much argued reason for these developments is represented by the fact that foreign banks are entering developing and emerging markets for different reasons, aiming to follow their costumers and to exploit local opportunities (Clarke et al, 2001)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: Journal of Eastern Europe Research in Business & Economics
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
