Physical Sciences and Mathematics Commons^™

Foreign Bank Efficiency In Australia: What Makes A Difference?, Jan-Egbert Sturm, Barry Williams

Barry Williams

Purpose – The purpose of this paper is to explore the factors that affect differences in measured efficiency of foreign-owned banks operating in Australia. The relevance of both comparative advantage theory and new trade theory to multinational banking in Australia will be tested.

Design/methodology/approach – A three stage research method is employed. First, estimates of foreign bank efficiency are drawn from a larger sample of domestic and foreign banks in Australia. Efficiency is estimated using parametric distance functions, applying several different specifications of inputs and outputs. Second, factor analysis is used to estimate a series of common factors drawn from …