Comparative analysis of banking production frameworks in eastern european financial markets

This paper performs comparative analysis of the non-radial Russell output technical efficiency measures of 13 Eastern European banking systems assuming a banking production with risk as an undesirable output and where output components can be negative. This is analysed utilizing three modelling specifications; the intermediation, production and profit methodologies. Along with distribution and inter-distribution mobility analysis of the efficiency scores across alternative methodologies, we also estimate and statistically compare the distributions of estimated efficiency scores using the bootstrap-based Simar–Zelenyuk-adapted-Li test. The results suggest that although the efficiency levels differ across the approaches, change in positions of the banks relative to the mean is not substantial across the three methodologies.