Financial innovation and efficiency in the Barbadian banking industry

Created 21 Jul, 2003
Categories Working Papers Roland Craigwell Special Collection
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This study estimates efficiency scores for Barbadian commercial banks for the period 1979 to 1999 using data envelopment analysis and the stochastic cost frontier methodology and, then, utilises these to examine the impact of financial innovation. The computed efficiency scores suggest that the average bank in Barbados is relatively efficient when compared to the results of similar studies, while the panel regression findings show that financial innovation is a significant determinant of bank efficiency along with bank size, loan-to-asset ratio and national income growth. JEL, C43, G21, O31)

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