Research Discussion Papers, Bank of Finland
Managers and efficiency in banking
Abstract: This paper presents evidence on the impact of managers on
cost efficiency in banking. Stochastic frontier analysis is applied to a
unique Finnish data set. The paper finds that manager age and education
have strong yet complicated effects. University education enhances
efficiency if the manager is running a large bank. Managing director
changes are systematically followed by efficiency changes. Manager
retirement typically causes an efficiency improvement, whereas other
manager changes can either improve or weaken efficiency.
Keywords: efficiency; banking; managers; (follow links to similar papers)
JEL-Codes: G21; L25; M19; (follow links to similar papers)
34 pages, September 18, 2007
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