COMMUNITY LENDING, BANK EFFICIENCY, AND ECONOMIC DUALISM

The literature suggests that asymmetric information in less developed economies may contribute to credit-market failure that is reflected in the economic efficiency of lending firms. This research tests whether rural banks located in the Lower Mississippi Delta Region (LMDR), the poorest rural region in the U.S., are less efficient than other rural banks. Rural banks in the LMDR are found to be technically less effic ient than their non-LMDR counterparts.