Abstract
This study examines the efficiency of the Japanese banking system utilising the slacks-based measure. In addition, we also extend the comparative bank modelling methodology literature by utilising both the intermediation and production approaches, together with the profit/revenue-based approach, proposed in [Berger, A.N., Mester, L.J., 2003. Explaining the dramatic changes in performance of US banks: technological change, deregulation, and dynamic changes in competition. J. Financial Intermed. 12, 57–95]. We find that, across the three methodologies, there are marked differences in: mean efficiency scores; the dispersion of efficiency scores; and the ranking of banks and bank sectors. Hence, the results demonstrate a very high degree of modelling dependence, which has importance in the context of policy responses.
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More From: Journal of International Financial Markets, Institutions and Money
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