EFFICIENCY OF FINANCIAL INSTITUTIONS - INTERNATIONAL SURVEY AND DIRECTIONS FOR FUTURE-RESEARCH

This paper surveys 130 studies that apply frontier efficiency analysis to financial institutions in 21 countries. The primary goals are to s ummarize and critically review empirical estimates of financial instit ution efficiency and to attempt to arrive at a consensus view. We find that the various efficiency methods do not necessarily yield consiste nt results and suggest some ways that these methods might be improved to bring about findings that are more consistent, accurate, and useful . Secondary goals are to address the implications of efficiency result s for financial institutions in the areas of government policy, resear ch, and managerial performance. Areas needing additional research are also outlined.