Is There a Gap of Banking Efficiency Between Accession and Non-accession Countries in Central and Eastern Europe

Abstract

This thesis divides the Central and Eastern European countries into two groups: accession countries which have or will attend Europe Union and non-accession countries which are not willing to attend Europe Union. The accession countries are supposed to have motivation to improve their own cost structure and banking efficiency, which may make them more efficient than non-accession countries. This thesis first utilizes the Seemingly Unrelated Regression technique to obtain the Allen Partial Elasticity, and then adopts Stochastic Frontier Approach to get X-efficiency. This thesis finds that accession countries are more efficient than non-accession countries, and the structure of the banking system has significant effect on efficiency.